The United Kingdom raises prohibition and opens the door to Etn crypt for retail investors
By Canuto
The British financial regulator announced that it will lift the prohibition for retail investors to access Cryptocurrency ETN, allowing greater participation and reinforcing the position of the United Kingdom as a competitive center.
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- The FCA will allow individual consumers in the United Kingdom to invest in ethn crypto.
- Before available for professionals, retailers can access from regulated bags.
- The opening seeks to support the growth and competitiveness of the crypto industry in the country.
- The prohibition of crypto derivatives for retailers will be maintained.
The United Kingdom is opening the door for retail investors to access bags linked to the cryptocurrencies, after local regulators lifted a restriction.
The United Kingdom’s Financial Behavior Authority (FCA) issued a statement on Friday, informing that it has eliminated a prohibition that prevented retail investors from accessing stocks listed in the stock market (ETN) linked to Bitcoin and other cryptocurrencies.
Although in markets such as the United States and the European Union, ETNs and funds quoted in the stock market (ETF) of cryptocurrencies have become popular regulated investment options, in the United Kingdom these instruments were restricted for retail investors since 2021, allowing only professional merchants to access.
The newly informed change means that now the British retail investors will be able to access the ETNs, as long as they are negotiated in an exchange approved by the FCA. The regulator had allowed such products to be negotiated in places such as the London Stock Exchange last year, but only among professional investors.
No restrictions for retail customers
An ETN is an unusual financial instrument that follows the performance of an asset (such as raw materials, currencies or cryptocurrencies). Unlike an ETF, an ETN does not have underlying assets, but it is a debt that promises to replicate its performance, paying the investor to expiration or sale, similar to a bonus, but without regular interests.
At the time, the limitation of the FCA aimed to protect consumers from volatility and inherent risks of the digital asset market, mitigating possible losses among little sophisticated investors. However, with global booming cryptocurrencies, the measure began to be perceived as an obstacle to the financial position of the United Kingdom in the international market.
As other economies advanced, the United Kingdom recognized the need to change their rules based on not being behind.
From the regulatory perspective, the FCA’s decision to lift the prohibition represents a balance between consumer competitiveness and integrity, allowing individual investors to legally access financial instruments of cryptocurrency, such as Bitcoin and Ethereumthus opening the opportunity to a greater diversification of their portfolios.
“This consultation demonstrates our commitment to support the growth and competitiveness of the United Kingdom cryptocurrency industry“commented David Geale, Executive Director of Digital Payments and Finance of the FCA.
“We want to rebalance our risk approach and lifting the ban would allow people to make the decision of whether a high -risk investment is adequate for them, since they could lose all their money“He added in the note.
United Kingdom seeks to catch up with the crypts
The regulated financial vehicle market for cryptocurrency has experienced a meteoric increase since the United States approved in January 2024 the first ETFs of Bitcoin in the country’s cash. Local cryptocurrency products now supervise more than USD $ 130 billion – approximately eight times the total value of European ETPs, with a decade of existence.
The incoming administration of Donald Trump has motivated a greater appetite for the new class of assets, as it embraces the sector and seeks to implement new favorable regulations.
The last measure in the United Kingdom reflects the broader efforts of the country to align with global regulatory changes. The authority seeks to establish a new rules frame for the cryptocurrency industry, and published in April a draft together with a public consultation on the regulatory regime. The new legislation could occur as soon as before 2025 ends.
Even so, The FCA emphasized today that the prohibition on retail access to cryptocurrency derivatives It will remain in force, while the regulator continues to monitor the evolution of the market and considering its approach to this type of investments.
Article written with the help of AI, by Hannah Estefanía Pérez / Diariobitcoin
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