Bitcoin News Today: UK Unbans Crypto ETNs, But Misses 4-Year Growth Window as Global Rivals Surge Ahead

The United Kingdom's Financial Conduct Authority (FCA) has officially lifted a four-year ban on retail access to crypto exchange-traded notes (ETNs), marking a pivotal shift in the country's approach to digital assets. Effective October 8, 2025, U.K. investors can now purchase crypto ETNs listed on FCA-recognized exchanges like the London Stock Exchange (LSE), provided they meet suitability criteria and risk disclosures. The move follows years of regulatory hesitation, during which the FCA cited concerns over volatility and market manipulation. However, officials now argue that the market has matured, with improved product structures and custodial safeguards.

While the ban's reversal is celebrated as a step toward mainstream adoption, critics call it "too little, too late." The U.S. and EU had already embraced crypto-linked products, with the U.S. approving spot Bitcoin ETFs in 2024 and European markets listing crypto ETNs as early as 2021. U.K. investors missed years of growth, and major platforms like IG and AJ Bell face delays in integrating cETNs into their portfolios due to compliance hurdles. Additionally, the FCA's decision excludes crypto ETFs and derivatives, leaving a gap in retail access to direct crypto exposure.

The FCA also announced that crypto ETNs can be held tax-free in Individual Savings Accounts (ISAs) and registered pensions starting October 2025, with full tax advantages preserved until 2026. This aligns with broader efforts to integrate digital assets into mainstream financial planning, though the FCA emphasized continued oversight under its Consumer Duty framework to prevent mis-selling.

Meanwhile, Luxembourg has become the first Eurozone country to allocate sovereign wealth to Bitcoin. The intergenerational Fund for the Stability of Luxembourg (FSIL) invested €9 million (1% of its portfolio) in Bitcoin ETFs, citing long-term confidence in digital assets. The move, announced during the 2026 budget session, positions Luxembourg as a regulatory innovator, balancing risk management with strategic diversification. Unlike direct Bitcoin purchases, the fund's exposure is routed through ETFs to mitigate custody risks and ensure compliance with EU rules. Analysts view the allocation as symbolic, signaling institutional acceptance of Bitcoin as a hedge against macroeconomic uncertainties.

In another regulatory shift, the Bank of England (BoE) announced exemptions for crypto exchanges from proposed stablecoin holding caps, softening its stance amid global competition. Previously, the BoE had proposed limiting individual and business stablecoin holdings to £20,000 and £10 million, respectively. Industry lobbying and fears of stifling innovation prompted a reversal, with the BoE granting flexibility to firms requiring larger reserves for liquidity. Governor Andrew Bailey acknowledged stablecoins' role in modern finance, stating, "Innovation in payments will not stop at the edge of traditional banking-the goal is to manage that innovation safely".

The BoE also plans to integrate stablecoins into its Digital Securities Sandbox, a pilot program for blockchain-based financial experiments. This aligns with the U.S. and EU's regulatory frameworks, such as the GENIUS Act and MiCA, positioning the U.K. to compete in the $50 trillion stablecoin payments market projected by 2030.

These developments highlight a global trend toward balancing innovation with oversight. While the U.K. and Luxembourg demonstrate cautious optimism, challenges remain, including regulatory arbitrage and the need for cross-border coordination. As digital assets mature, the coming years will test whether these policies foster sustainable growth or lag behind technological progress.

Source: [1] UK Lifts Retail Ban on Crypto ETNs, Allowing Tax-Free ... (https://www.coindesk.com/policy/2025/10/09/uk-lifts-ban-on-crypto-etns-paving-way-for-holding-them-tax-free-in-pensions-isas)

[2] UK Finally Lifts ETN Ban - 4 Years Too Late - 99Bitcoins (https://99bitcoins.com/news/altcoins/too-little-too-late-uk-lifts-4-year-etn-ban-fca-regulators-missed-generational-starting-gun/)

[3] UK Lifts Ban on Crypto ETNs as Market Matures | Coin Insider (https://www.coininsider.com/news/2025/10/uk-lifts-ban-on-crypto-etns-as-market-matures/)

[5] UK Prepares To Reverse Crypto ETN Ban (https://cryptoweekly.co/news/uk-reverses-crypto-etn-ban/)

[6] Luxembourg Sovereign Wealth Fund Buys Bitcoin, Reveals ... (https://dailyhodl.com/2025/10/11/luxembourg-sovereign-wealth-fund-buys-bitcoin-reveals-groundbreaking-european-crypto-allocation/)

[7] Luxembourg Sovereign Wealth Fund Invests $9 Million ... (https://coinpedia.org/news/luxembourg-sovereign-wealth-fund-invests-9-million-in-bitcoin-etfs/)

[8] Luxembourg: we were the first country in the Eurozone ... (https://en.cryptonomist.ch/2025/10/09/luxembourg-wealth-fund-bitcoin-allocation/)

[9] Luxembourg's $9M Bitcoin ETF Move Breaks Eurozone Ground (https://coin360.com/news/luxembourg-sovereign-wealth-fund-bitcoin-etf-investment)

[10] Luxembourg Allocates Bitcoin in Sovereign Fund (https://coinlineup.com/luxembourg-bitcoin-sovereign-fund-etf-allocation)

[11] UK Crypto Regulation Moves Forward With BoE's New Stablecoin ... (https://cryptonews.net/news/finance/31756748/)

[14] Bank of England Pivots: Crypto Exchanges Exempted from ... (https://markets.financialcontent.com/advisoranalyst/article/breakingcrypto-2025-10-7-bank-of-england-pivots-crypto-exchanges-exempted-from-stablecoin-limits-in-landmark-move)

[15] UK Crypto Regulation Moves Forward With BoE's New Stablecoin ... (https://coinpedia.org/news/uk-crypto-regulation-moves-forward-with-boes-new-stablecoin-approach/)