The U.Ok. formally lifted its multi-year retail ban on crypto exchange-traded notes (ETNs), saying the digital asset market has matured sufficient for people to speculate by way of regulated merchandise, even when traders should wait somewhat longer so as to add them to their portfolios.

In a coverage replace Wednesday, the Monetary Conduct Authority (FCA) confirmed that retail traders can now purchase crypto ETNs (cETNs) listed on FCA-recognized exchanges, such because the London Inventory Change (LSE).

Crypto ETNs are exchange-traded debt notes that monitor bitcoin or ether costs with out giving traders direct coin possession. They fall underneath the umbrella of exchange-traded merchandise (ETPs) that additionally consists of exchange-traded funds (ETFs.)

Whereas world ETNs sometimes don’t require bodily backing, on the London Inventory Change, crypto ETNs have to be totally bodily backed by underlying belongings held by regulated custodians and can’t use leverage.

Whereas the ban formally lifted on Wednesday, there’s a delay earlier than retail traders will be capable of add cETNs to their portfolios, which reviews say is right down to the FCA solely beginning to settle for prospectuses for potential merchandise on Sept. 25.

Crypto ETNs in ISAs and pensions

The U.Ok. tax authority, HM Income & Customs, stated in a coverage paper revealed Wednesday that crypto ETNs could be held in shares and shares Particular person Financial savings Accounts (ISAs) and registered pension schemes — permitting traders to earn tax-free returns inside these accounts.

From April 6, 2026, cETNs can be reclassified as Modern Finance ISA (IFISA) investments, although their tax benefits will stay unchanged. Officers stated the shift displays the federal government’s dedication to diversifying long-term financial savings choices and integrating digital finance into mainstream funding buildings.

London Inventory Change already lists crypto ETNs

The London Inventory Change already lists a number of crypto ETNs from issuers resembling 21Shares, WisdomTree and ETC Group, beforehand out there solely to skilled traders. These merchandise can now be accessed by retail traders by way of regulated platforms.

Nonetheless, fashionable U.S.-listed spot crypto ETFs like BlackRock’s IBIT stay ineligible, as they commerce in {dollars} on non-U.Ok. exchanges and will not be acknowledged underneath FCA guidelines.

Main ISA suppliers — together with IG, AJ Bell, and Hargreaves Lansdown — are anticipated to evaluation the coverage earlier than enabling cETNs on their platforms. The rollout is predicted to be gradual as suppliers adapt compliance methods and custody preparations.