Analysts Expect 20% Growth in UK Crypto Sector After Regulatory Shift
The United Kingdom’s financial regulator has lifted its four-year ban on crypto exchange-traded notes (ETNs), signaling a major policy shift and growing institutional confidence in the digital asset sector.
In a statement released Wednesday, the Financial Conduct Authority (FCA) said retail investors will now be permitted to trade crypto ETNs through FCA-approved exchanges. The regulator cited market maturity and better investor understanding as key reasons for the decision.
The FCA originally banned crypto ETNs in January 2021, arguing that they posed “excessive risks” to retail investors and lacked legitimate investment value. The regulator’s latest move reflects a broader policy shift, as the government continues developing a comprehensive crypto regulatory framework set to roll out in 2026.
“Since we restricted retail access to crypto ETNs, the market has evolved, and products have become more mainstream and better understood,” said David Geale, the FCA’s executive director for payments and digital finance. “We’re providing consumers with more choice while ensuring there are protections in place.”
A crypto ETN is a debt-based investment product that tracks the performance of cryptocurrencies such as Bitcoin or Ethereum without requiring the investor to hold the underlying assets directly. The underlying digital assets are typically stored by regulated custodians, ensuring greater security and transparency.
Evolving Policy and New Tax Benefits
In addition to lifting the ban, the government announced that crypto ETNs can now be included in registered pension schemes starting October 8, with plans to extend access to Stocks & Shares ISAs by April 2026. This gives UK investors new tax-efficient investment opportunities within the regulated system.
Market Growth and Investor Confidence
A new report by IG Group estimates the UK’s crypto market could expand by up to 20% after the relaunch of ETNs. Their research found that 30% of UK adults would consider investing in digital assets via ETNs, largely due to the added safety and oversight these products provide.
“The reintroduction of ETNs could bridge the gap between traditional finance and crypto,” said one analyst. “It’s a vote of confidence in the sector’s maturity.”
With stronger regulation and improved investor protections, the UK’s decision marks a turning point for the country’s digital asset landscape, reinforcing its ambition to become a leading global hub for crypto innovation.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.