FCA moves to lift the retail ban on Crypto Etns to enhance the competitiveness of the market in the UK
The UK’s Financial Conduct Authority (FCA) suggested lifting the long ban on retailers who purchase traded products (ETPS) associated with encrypted currencies.
The move comes as part of an attempt to revitalize the competitiveness of encryption in Britain and better agree on the market with the United States, as the window of investment funds traded under the Trump administration increased.
If implemented, the new rules will allow retail investors to reach the comments on the stock exchange (ETNS) supported by cryptocurrencies such as Bitcoin and ETHER, provided that they are included in the FCA exchanges.
These products have so far been restricted to professional investors despite being trading in places like the London Stock Exchange since last year.
The pressure of the American market is pushing the transformation of politics
FCA’s re -thinking comes at a time when investment products in Crypto have gained a rapid traction in the United States.
ETFS Spot Bitcoin, which was presented there in early 2024, is now running more than $ 130 billion of assets – a number that damps $ 16 billion under management by European ETPS.
This contrast increased the pressure on the UK organizers to support innovation and prevent the country from overcoming it.
source: Bloomberg
“This consultation clarifies our commitment to supporting the growth and ability of competitiveness in the UK’s encryption industry,” said David Gill, Executive Director of Payments and Digital Assets at FCA.
“We want to balance our approach to risk and allow people to choose about whether this extreme investment is appropriate for them.”
FCA’s ban on retail sale will remain to Cryptoasset derivatives.
Change FCA in the situation regarding encryption
The proposal is a remarkable exit from the previous messages of the regulator.
In 2021, FCA has warned retail consumers that investing in cryptocurrencies and relevant products may lead to a full financial loss.
“Investing in encrypted societies, or associated investments and lending, it generally includes a very high risk with investor money. If consumers invested in these types of products, they must be ready to lose all their money.”
At that time, the Supervisory Authority said that such investments were fraught with risks and not protected by the financial grievance secretary service or the financial services compensation plan.
While these warnings are still valid, FCA now appears to indicate a shift towards granting retailers more autonomy, albeit with complete awareness of risks.
FCA lift the ban on Crypto Etns huge news today that since we first met with HMT several years ago, FCA now announced its intention to lift the ban imposed on providing retail investors. Lifting the ban will enable the sale of Etns to retail customers by FCA
A wider regulatory reform
This proposal is part of a wider effort by the UK government to formulate a comprehensive regulatory system for digital assets.
Finance Minister Rachel Reeves said that the country aims to become a “global pioneer in digital assets” and stressed that the organization should support innovation instead of obstructing this.
The legislation project, which was presented in April, determines a framework that brings exchanges, brokers and coding services to the organizational fold.
The Ministry of Treasury said that the next rules will merge the bad actors, while providing legitimate companies a clearer path to compliance.
The organizer has identified the encryption road map and recently published proposals about Stablecoins as well as other aspects of the system.
FCA’s advice is expected to conclude the ETP retail lifting later this year, with the expectation of the final rules in 2025.
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