The UK’s financial regulator is proposing to lift the ban on offering crypto-backed exchange traded notes (ETNs) to retail investors in a potential boost for the blockchain sector.
The first crypto ETNs listed in London were made available to UK investors last year, allowing the purchase of unsecured debt securities tracking the performance of Bitcoin and Ethereum.
However, the crypto instruments were only available to professional and institutional investors.
Under the proposed change from the Financial Conduct Authority (FCA), crypto ETNs could be sold to individual consumers, opening up a large pool of potential investors.
Financial promotion regulations would apply to consumer purchasable crypto ETNs, meaning individuals will be required to receive clear information on the risks and will not be allowed to be offered “inappropriate incentives” to invest.
“This consultation demonstrates our commitment to supporting the growth and competitiveness of the UK’s crypto industry,” said David Geale, executive director of payments and digital assets at the FCA.
“We want to rebalance our approach to risk and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them given they could lose all their money.”
The move marks the latest development from the FCA as it looks to establish a regulatory framework for the cryptoasset sector.
Though the regulator has shown scepticism in the past over cryptocurrencies, the government views a well-regulated crypto sector as a potentially strong economic growth driver.
Draft legislation has been released by the Treasury and the FCA has laid out a crypto roadmap, looking into areas including stablecoins and crypto derivatives.
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