The UK’s Financial Conduct Authority (FCA) has confirmed that from 8 October 2025, retail investors will be able to purchase crypto exchange-traded notes (ETNs) via regulated UK exchanges. This development reverses the FCA’s 2021 prohibition and signals a pragmatic evolution in the regulator’s approach to digital assets, and one which many industry commentators did anticipate.
Why the Policy Has Shifted
The FCA’s decision reflects the growing maturity of the crypto market. Over recent years, market infrastructure, custody frameworks, and disclosure standards have advanced considerably. For example, Fidelity Digital Assets secured FCA authorisation to offer institutional-grade custody in the UK. The London Stock Exchange recently launched crypto ETNs with rigorous listing requirements.
In tandem, major jurisdictions such as the European Union and United States have paved the way for regulated retail and institutional access to digital asset products, including EU-listed crypto ETFs under MiCA and SEC-approved spot Bitcoin ETFs launched in early 2024. As a direct result of this shift, and to support a broader savings landscape for UK investors, crypto ETNs will now be eligible to be held within stocks and shares ISAs and registered pension schemes from 8 October 2025, providing a tax-efficient route for digital asset exposure. From April 2026, crypto ETNs will transition to the Innovative Finance ISA (IFISA) category while retaining their tax-advantaged status
Key Features of the New Regime
To balance innovation with investor protection, the FCA will permit retail access only to crypto ETNs listed on approved UK exchanges. These instruments will also be designated as Restricted Mass Market Investments (RMMIs). For regulated firms, this classification brings several obligations:
- Compliance with enhanced financial promotion rules, ensuring that communications are fair, clear, and not misleading.
- Appropriateness assessments to confirm that retail clients understand the nature and risks of crypto ETNs before investing.
- Adherence to risk warning and disclosure standards designed to improve consumer understanding.
These measures are intended to manage the inherent volatility and counterparty risk associated with crypto products while preserving market integrity.
Implications for Regulated Firms
This policy change could open new opportunities for product innovation and investor engagement. Firms may wish to explore potential listings, custody partnerships, or distribution models that align with the FCA’s framework. Increased regulatory clarity and market participation are also likely to support the development of UK-listed, compliant crypto instruments, encouraging broader institutional involvement.
However, it remains essential to manage client expectations. Retail investors will not benefit from the Financial Services Compensation Scheme, and crypto ETNs continue to carry issuer and counterparty risks. Importantly, the FCA’s prohibition on crypto derivatives for retail clients remains in place, reflecting ongoing regulatory caution.
A Measured Step Forward
The FCA’s announcement represents a carefully controlled opening of the retail market to digital asset exposure. For firms, it underscores the importance of maintaining high compliance standards while engaging with new product categories.
By balancing access, risk mitigation, and market competitiveness, the UK is positioning itself as a responsible leader in digital finance regulation, a message that should resonate across both institutional and retail segments.
