The announcement by the Financial Conduct Authority (FCA) that it will facilitate the listing of crypto investment products has been met with approval from figures in the crypto industry. The FCA has stated that it will allow professional investors to trade crypto exchange-traded notes (ETNs) created by recognized investment exchanges (RIEs). However, retail investors will still be restricted from participating, limiting the impact of the FCA’s announcement on broader crypto adoption. In Europe, regulations prevent the offering of an exchange-traded fund (ETF) for a single asset such as Bitcoin or Ether, making ETNs the preferred exchange-traded product (ETP). With the FCA’s approval, traditional finance and traders in the UK may soon have easier access to crypto-related financial products. However, the conditions attached to the approval have raised concerns. Natalia Latka, policy director at blockchain analytics firm Merkle Science, sees the FCA’s decision as a positive step towards integrating cryptocurrency-related products into a regulated environment and bridging the gap between the crypto sector and the traditional financial industry. However, she also highlights the exclusion of retail investors and the UK’s hesitation in embracing the growing interest in crypto assets among this group. George McDonaugh, co-founder and co-managing director of KR1, a European digital asset investment company, sees the FCA’s decision as a move in the right direction but believes that more needs to be done to make the market more accessible. He calls for more companies to be enfranchised into UK markets to achieve the country’s ambition of becoming a global hub for the crypto industry. Overall, if the UK wants to realize its crypto hub aspirations, it needs to take further steps to broaden participation quickly.
Crypto investment products get UK FCA's nod, but there's a small hitch