Financial regulators in the UK have lifted the ban on cryptocurrency exchange-traded notes (CETNs) to provide retail investors with a welcome move by industry leaders, a step towards aligning the country with global cryptocurrency markets and strengthening its position as a hub for digital assets.
On Friday, the UK Financial Conduct Authority (FCA) Reversed the ban Regulatory changes that will take effect from October 8, the ban was implemented in January 2021, citing extreme volatility and a “lack of legal investment demand.”
The CETN ban reversal reflects changes in regulators’ approach to crypto assets. The FCA director said in a statement that the decision reflects how the market is developing and how the development of crypto-related products is better understood.
As the FCA lifted the ban, onlookers and industry stakeholders shared their ideas about development. Some praised the move as a step forward, while others used satirical criticism of the UK.
Community Response to FCA’s Release of Ban on Encrypted ETN
“We are very happy to see this reversal,” said Ian Taylor, Cryptouk board consultant and chief operating officer of HT Digital. “UK has been an outlier for ETN so far. This change reflects the progress we have made in introducing a more proportional approach to consumer risk.”
Taylor told Cointelegraph that Cryptouk, a trade association in the digital asset industry, has been lobbying for inclusive access to regulatory products including Crypto assets that do not require direct ownership.
Riccardo Tordera, Director of Policy and Government Relations for UK-based payment industry agencies, echoes Taylor’s optimism:
“The inherent nature of encryption means that everyone can access it from anywhere. The FCA’s ban on retailing of certain crypto products is hindering the UK’s opportunity to become a global crypto hub.”
Tordera told Cointelegraph that the FCA’s decision allowed individuals to “be at their own discretion.”
He said restricting access to CETNS puts the UK at a disadvantage and undermines its global competitiveness.
“It’s a welcome move,” he added. “The FCA ban is very protective and has been smoothed out when professional investors were allowed to enter last year.”
Although some welcome the move, skeptics have also drawn opinions. Wallstreetbets founder Jaime Rogozinski summed up the moment sarcastically, saying: “Britain loves economic risks, not the kind that involves vegetable or industrial policies.”
Related: UK cryptocurrency hopes stalls, but “signs of encouragement” are there
Crypto derivatives are still banned
Although the FCA reversed the ban on CETN, regulators clarified that crypto derivatives remained banned.
“The FCA ban on retail access to crypto asset derivatives will remain in place,” FCA explain On Friday.
Crypto derivatives include futures, options and permanent contracts. The regulator added that it will monitor market developments and consider its approach to high-risk investments.
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