The UK has made a significant move toward integrating with global crypto markets by lifting the ban on crypto exchange-traded notes for retail investors.
FCA's Stance on Crypto ETNs
The Financial Conduct Authority (FCA) of the UK has decided to lift the ban on retail investor access to crypto exchange-traded notes (cETNs), which had been in place since January 2021. This ban was put in place due to high volatility and a lack of legitimate investment needs. According to the FCA, this decision reflects a change in the regulator's approach to crypto assets, considering the evolution of the market.
Community Reactions to the Regulator's Decision
After the ban was lifted, industry representatives shared their thoughts on the decision.
"We are delighted to see this reversal," said Ian Taylor, a board adviser at CryptoUK. "This change reflects the progress we’ve made toward a more proportionate approach to consumer risk."
Riccardo Tordera of The Payments Association also echoed this sentiment:
> "The intrinsic nature of crypto means it can be accessed by everyone, from everywhere. The FCA ban on retail access to certain crypto products was hindering the UK’s chances of becoming a global crypto hub."
Situation with Derivative Financial Instruments
While the FCA lifted the ban on cETNs, it clarified that the ban on crypto derivatives remains in place. "The FCA’s ban on retail access to crypto asset derivatives will remain in place," the regulator stated on Friday. This includes futures, options, and perpetual contracts. The regulator intends to monitor market developments and consider its approach to high-risk investments.
The lifting of the ban on cETNs could be an important step for the UK in creating a more open and competitive digital asset market, although the issue of access to derivative instruments remains unresolved.
