FCA to lift the ban on offering crypto ETNs to retail investors

FCA mentioned that similar offerings are already available around the world, and adopting this would mean that cETNs could be sold to individual consumers rather than just professional investors. This applies only if they traded on a FCA-approved investment exchange platform.

FCA’s stance on high-risk investments

The regulator wants financial promotion rules to apply so that consumers to get information on the risks and be aware of inappropriate incentives to invest, in the same way as if they purchased crypto assets traditionally.

This move reflects the FCA’s commitment to supporting growth and competitiveness in the UK’s crypto sector. By lifting the ban, the regulator is looking to rebalance its approach to risk and give more choice to individuals, even though this is a high-risk investment in which they could lose everything they put in.

This development follows the FCA’s mission to continue to establish a regulatory framework for cryptocurrency services. Recently, the regulator made public proposals for issuing stablecoins, which it believes will allow UK crypto firms to compete internationally. Currently, the industry is dominated by two USD-pegged stablecoins, which represent about 90% of the market. Research by the regulator found UK consumers were more likely to get into stablecoins if the area had increased regulatory protections. The Bank of England also aims to publish its own consultation paper on stablecoins later this year.

Moreover, BCP Technologies, a UK-registered crypto firm, launched a GBP-pegged stablecoin after testing with the FCA-regulated sandbox. Tokenised GBP (tGBP) offers both individuals and institutions a way to transfer GBP on-chain, supported by multiple wallet options.

Additionally, FCA’s ban on retail access to crypto asset derivatives will remain in place until further notice, as the FCA will further monitor the market developments and consider its approach to high-risk investments.