Bitcoin News Today: UK FCA Considers Lifting cETN Ban as Global Demand and US ETF Approval Rise

The UK’s Financial Conduct Authority (FCA) is reconsidering its 2020 ban on retail access to crypto exchange-traded notes (cETNs), signaling a potential shift in the country’s approach to cryptocurrency regulation. If approved, the change would allow UK investors to trade cETNs—products linked to Bitcoin and Ethereum—through regulated platforms. This development comes amid growing global demand for crypto investment vehicles and follows the U.S. approval of spot Bitcoin ETFs earlier this year, which have attracted billions in institutional and retail capital [1].

CryptoUK, the UK’s leading industry group, has welcomed the FCA’s proposed move but emphasized that broader access is necessary. The organization argued that crypto ETFs, which offer a more familiar and lower-risk structure for traditional investors, should be the next step. ETFs eliminate direct custody risks, often have lower fees, and align with existing financial norms, making them a safer gateway for retail participation compared to direct crypto ownership [2].

Industry players, including product issuer 21Shares and Coinbase UK, echoed this sentiment. They warned that restricting access to cETNs alone could push investors toward unregulated offshore platforms, increasing systemic risks. Keith Grose of Coinbase UK highlighted the UK’s potential to leverage its position as a “second mover,” learning from U.S. and European frameworks to establish a clear regulatory path. Delays, however, risk falling behind jurisdictions like Germany and Switzerland, where crypto ETFs are already available [3].

The FCA’s consultation process focuses on expanding cETN access while addressing risks such as market volatility and liquidity. Final rules are expected after summer, with key decisions including whether to extend approval beyond Bitcoin and Ethereum and whether spot crypto ETFs will be included. For now, cETNs could provide a regulated alternative for UK savers to gain indirect crypto exposure without handling private keys, though regulators and industry participants caution that high volatility remains a significant risk [1].

This regulatory shift aligns with broader efforts to integrate crypto into traditional financial systems. Discussions around crypto custody, stablecoin oversight, and blockchain-based settlements are intensifying, reflecting a global trend toward mainstreaming digital assets. Innovations like tokenized equities and bonds on blockchain platforms are also gaining traction, potentially enabling 24/7 trading and real-time settlements. However, such advancements require robust infrastructure and regulatory alignment to ensure stability and trust [3].

The UK’s approach could set a precedent for balancing innovation with investor protection. By learning from international models and addressing systemic risks—such as fraud and market manipulation—the FCA aims to foster responsible growth without compromising its reputation for prudent regulation. Stakeholders will closely monitor the FCA’s decisions, as the outcome may determine whether the UK can solidify its position as a global leader in digital asset innovation [2].

Source:

[1] [UK Crypto Regulation Update: FCA May Approve Retail cETNs] (https://coinpedia.org/news/uk-crypto-regulation-update-fca-may-approve-retail-cetns/)

[2] [The UK Has One of the Most Vibrant Crypto Retail Markets in the World—It Needs to Capitalise on It] (https://www.finextra.com/blogposting/28975/the-uk-has-one-of-the-most-vibrant-crypto-retail-markets-in-the-world---it-needs-to-capitalise-on-it)

[3] [Integrating Traditional Financial Instruments with Blockchain to Change the World] (https://www.fxstreet.com/education/integrating-traditional-financial-instruments-with-blockchain-to-change-the-world-202507251147)