UK Financial Regulator The Financial Conduct Authority (FCA) said it will give consumers access to crypto exchange traded notes (CETNs) as the watchdog aims to grow digital assets in the UK.
The move means that CETNs could be sold to individual consumers rather than just professional investors in the UK, provided that they are trading on an FCA-approved investment exchange (a recognized investment exchange or RIE), according to an FCA press release on Friday.
FCA pointed out that similar products are already available in other countries. FCA’s ban on retail access to cryptoasset derivatives will remain in place while the regulator continues to monitor market development and consider its approach to high-risk investment, release.
As regulatory regimes are introduced all over the world, Britain feels the need to compete, as shown in the British government consultations on crypto rules and recent comments from the Chancellor of Tax Rachel Reeves.
“This consultation demonstrates our commitment to support the growth and competitiveness of the UK’s crypto industry,” said David Geal, CEO of payments and digital assets at FCA.
“We want to rebalans our approach to risk and abolition of the ban would allow people to make the choice as to whether such a high-risk investment is right for them as they could lose all their money,” Geal said in a statement.
Britain’s existing rules for financial promotion will apply, so that consumers get information about the risks and would not be offered inappropriate incentives to invest, in the same way as if they bought cryptoassets directly, FCA said.
“This development is fully in line with the UK’s ambition to position itself as a sophisticated jurisdiction in the crypto area,” said Diego Ballon Ossio, partner at Clifford Chance via E email.
“It will not only lock exposure to crypto assets for retail investors, but stands as a signal that the United Kingdom is open to crypto. More work is needed with the cautious treatment of these assets, but we are definitely heading in the right direction,” he said.
