The UK is preparing to lift a long-standing ban on a crypto financial product – Exchange-Traded Notes (ETNs), a move seen as an important step to catch up with the US and Europe in the global crypto market. The UK government and financial regulators stated that lifting the ban would help strengthen the country's position as a global hub for digital assets.
FCA Proposal: Lift Restrictions on Retail Investors Purchasing Crypto ETNs
The UK Financial Conduct Authority (FCA) released a proposal last Friday (early June) to lift the ban on retail investors purchasing crypto ETNs that has been in place since 2019. ETNs are a type of debt instrument that is linked to the price of a specific asset (in this case, cryptocurrency), allowing investors to indirectly participate in the digital currency market through regulated exchanges.
The FCA previously imposed comprehensive restrictions on such products due to concerns about "potential risks to consumers." However, this change in attitude clearly indicates that the easing of the ban is intended to "support economic growth and competitiveness in the UK."
Only ETNs are unbanned, the ban on encryption derivatives remains in place.
It is worth noting that this proposal only involves ETNs and does not include higher-risk encryption derivative products. The FCA stated that the latter will still maintain the ban, as the risk assessment results are still unfavorable for the opening of the retail market.
FCA payments and digital assets executive director David Geale said: "We want to strike a balance between risk management and market growth, allowing investors to choose whether to participate in such high-risk investments based on their own risk tolerance."
Industry insiders are optimistic: the UK is finally no longer alone.
The FCA's shift in attitude is a significant encouragement for the encryption industry. Industry insiders believe that the UK has long been conservative in digital asset regulation compared to the United States, the European Union, and other regions, resulting in the local market and innovation ecosystem being marginalized.
CryptoUK advisor Ian Taylor pointed out: "The UK has been one of the few countries in the world to impose a comprehensive ban on crypto ETNs. This policy shift is expected to improve investor protection and give us the opportunity to promote further openness in the crypto derivatives market."
Kraken: The market has matured, and restrictions should keep pace with the times.
The general manager of the crypto exchange Kraken in the UK, Bivu Das, stated more bluntly that this proposal is an important milestone for the UK's crypto ecosystem.
He stated: "This represents that regulators acknowledge the market has significantly matured, and past restrictive measures are no longer appropriate. If the UK wants to maintain a leading position in the global digital asset competition, it must continue to make such open decisions."
The UK plans to establish a complete encryption regulatory system by 2026.
This proposal also aligns with the UK's broader encryption policy blueprint. In April of this year, the government released a draft plan to establish a comprehensive set of crypto asset regulations, aiming for implementation before 2026.
The FCA is currently also launching multiple consultations and discussion papers, covering regulatory models for crypto exchanges, wallet service providers, and new asset classes, with the intention of creating a regulatory environment that aligns with traditional finance.
This article discusses the UK's plan to lift the ban on encryption ETNs, striving for a global leading position in digital assets. It first appeared in Chain News ABMedia.
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The UK plans to lift the ban on encryption ETN, striving to compete for a leading position in the global digital asset market.
The UK is preparing to lift a long-standing ban on a crypto financial product – Exchange-Traded Notes (ETNs), a move seen as an important step to catch up with the US and Europe in the global crypto market. The UK government and financial regulators stated that lifting the ban would help strengthen the country's position as a global hub for digital assets.
FCA Proposal: Lift Restrictions on Retail Investors Purchasing Crypto ETNs
The UK Financial Conduct Authority (FCA) released a proposal last Friday (early June) to lift the ban on retail investors purchasing crypto ETNs that has been in place since 2019. ETNs are a type of debt instrument that is linked to the price of a specific asset (in this case, cryptocurrency), allowing investors to indirectly participate in the digital currency market through regulated exchanges.
The FCA previously imposed comprehensive restrictions on such products due to concerns about "potential risks to consumers." However, this change in attitude clearly indicates that the easing of the ban is intended to "support economic growth and competitiveness in the UK."
Only ETNs are unbanned, the ban on encryption derivatives remains in place.
It is worth noting that this proposal only involves ETNs and does not include higher-risk encryption derivative products. The FCA stated that the latter will still maintain the ban, as the risk assessment results are still unfavorable for the opening of the retail market.
FCA payments and digital assets executive director David Geale said: "We want to strike a balance between risk management and market growth, allowing investors to choose whether to participate in such high-risk investments based on their own risk tolerance."
Industry insiders are optimistic: the UK is finally no longer alone.
The FCA's shift in attitude is a significant encouragement for the encryption industry. Industry insiders believe that the UK has long been conservative in digital asset regulation compared to the United States, the European Union, and other regions, resulting in the local market and innovation ecosystem being marginalized.
CryptoUK advisor Ian Taylor pointed out: "The UK has been one of the few countries in the world to impose a comprehensive ban on crypto ETNs. This policy shift is expected to improve investor protection and give us the opportunity to promote further openness in the crypto derivatives market."
Kraken: The market has matured, and restrictions should keep pace with the times.
The general manager of the crypto exchange Kraken in the UK, Bivu Das, stated more bluntly that this proposal is an important milestone for the UK's crypto ecosystem.
He stated: "This represents that regulators acknowledge the market has significantly matured, and past restrictive measures are no longer appropriate. If the UK wants to maintain a leading position in the global digital asset competition, it must continue to make such open decisions."
The UK plans to establish a complete encryption regulatory system by 2026.
This proposal also aligns with the UK's broader encryption policy blueprint. In April of this year, the government released a draft plan to establish a comprehensive set of crypto asset regulations, aiming for implementation before 2026.
The FCA is currently also launching multiple consultations and discussion papers, covering regulatory models for crypto exchanges, wallet service providers, and new asset classes, with the intention of creating a regulatory environment that aligns with traditional finance.
This article discusses the UK's plan to lift the ban on encryption ETNs, striving for a global leading position in digital assets. It first appeared in Chain News ABMedia.