The UK's financial regulator (FCA) is preparing to lift a ban that has hung over cryptocurrency-linked stock market products for more than four years: according to our information, retail investors will soon be able to access ETNs (Exchange Traded Notes) again, financial products similar to ETFs but backed by indices, including bitcoin and ether.
The decision, although still unofficial, is expected to be announced shortly. It would mark a significant U-turn from the line taken in 2020, when the FCA banned these products from the general public for investor protection reasons, deeming them "unsuitable, due to their volatility and complexity".
Since then, the landscape has changed considerably.
On the one hand, the global crypto ETF market has become more structured, with the arrival of giants such as BlackRock and Franklin Templeton, whose products have been well received in the US and Europe. On the other hand, demand for regulated cryptocurrency exposure vehicles continues to grow, among both professionals and retail investors.
A decision driven by European and US dynamics
The pressure has come from abroad in particular. In continental Europe, ETNs are already available to the general public, particularly in France and Germany.
Such institutions as BoursoBank have even formed partnerships with CoinShares or BlackRock to offer these products to their customers. This disparity in regulatory regimes has helped to isolate the UK from the rest of the European market.
"This is very good news for the UK market, which has been lagging behind," a London-based ETN issuer tells The Big Whale. The sentiment is echoed by CoinShares, one of the industry's leading players.
"We are looking forward to re-engaging with institutional investors and mainstream trading platforms, who can finally access our investment solutions again," says Benoît Pellevoizin, CoinShares' marketing director.
>> The Big Whale Report - Crypto investment offerings: European institutions ready to take off
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