The UK has officially lifted its four-year ban on trading crypto ETNs. The Financial Conduct Authority (FCA) stated that the crypto market has matured, products are better understood, and investors now have sufficient information. Analysts expect the move to attract new investors and expand the British crypto market by up to 20%.

Ban Lifted After Four Years

The ban, in place since January 2021, was introduced when the FCA deemed crypto ETNs too risky for retail investors. Now, the regulator has changed its stance. “Since restricting access to crypto ETNs, the market has evolved, and products are more common and better understood,” said David Geale, FCA’s Director of Digital Finance. With this decision, investors can now trade crypto ETNs on UK exchanges approved by the FCA.

What is an ETN and how it works

ETN stands for exchange-traded note — a financial instrument that allows investors to gain exposure to cryptocurrencies without directly owning them. It works similarly to stocks or bonds: investors buy ETNs on an exchange and benefit from the price movements of the underlying cryptocurrency. The actual crypto asset is securely held by a regulated custodian, offering a simpler and safer way to enter the crypto market than direct ownership.

Derivatives still off-limits

The FCA confirmed that trading crypto derivatives remains prohibited for retail investors. These products are complex and riskier, so they remain available only to professional investors.

Tax benefits and pension accounts

The reform also includes tax incentives. Starting in October 2026, crypto ETNs can be held in registered pension funds, and from April 2026, in Stocks & Shares Individual Savings Accounts (ISAs) — tax-free investment accounts. This gives crypto investments the same tax treatment as traditional stocks in the UK.

Market growth and investor interest

According to IG Group research, up to 30% of Britons would consider investing in cryptocurrencies through ETNs, citing better security, clear rules, and FCA oversight. With roughly 12% of the population already owning crypto, the easing of restrictions could draw millions of new investors and strengthen the UK’s position as a leading European hub for digital finance.

Sources:

https://cointelegraph.com/news/uk-lifts-ban-crypto-exchange-traded-notes

https://www.fca.org.uk/news/press-releases/fca-opens-retail-access-crypto-etns

https://cointelegraph.com/news/uk-industry-crypto-policy-labour-party-election