The UK’s Financial Conduct Authority (FCA) has proposed letting some retail investment funds invest up to 10% of their assets in cryptocurrency exchange-traded notes (ETNs).
This would apply to UCITS funds and some other retail schemes, marking another move toward wider acceptance of crypto investments in the UK. The FCA says the 10% limit would help manage risk while giving investors some exposure to digital assets through regulated funds.
The proposal is part of the FCA’s latest consultation paper and is a major step in the UK’s changing approach to crypto assets.
UCITS and NURS funds are like mutual funds in the U.S. They pool money from retail investors and invest it in managed portfolios under strict rules.
The FCA says capping crypto ETN exposure at 10% would lower the risk of big disruptions to fund performance while still letting investors access the growing digital asset sector.
This proposal comes after the regulator’s 2025 decision to lift rules that kept retail investors from buying crypto ETNs. Many saw that move as a sign that regulators are getting more comfortable with regulated crypto investments.
Supporters say crypto ETNs let investors get exposure to digital assets without having to buy, store, or manage cryptocurrencies themselves. Critics still point out the volatility and risks of this asset class.
If approved, this proposal could help the UK become a stronger market for regulated crypto investment products.
Source: fca.org.uk
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