The UK's Financial Conduct Authority (FCA) has just lifted the ban on crypto exchange-traded notes (cETNs). This is a huge moment for retail investors and crypto-friendly small and medium-sized enterprises (SMEs). Starting October 8, 2025, retail investors will get more ways to invest in crypto, and businesses can rethink how they operate in this dynamic financial environment.
Wider Access for Everyone
With this decision, more retail investors can now access crypto investments through FCA-approved exchanges. In other words, individuals can now invest in regulated products that follow Bitcoin and Ethereum. It’s a significant recognition of how the crypto market is maturing, and it will give consumers more options while keeping some consumer protections in place.
Impact on Crypto-Friendly SMEs
For crypto-friendly SMEs, cETNs are a chance to begin using crypto assets in their operations. Unlike a pooled fund, which can be complex, cETNs are unsecured debt. They let businesses gain access to crypto assets indirectly while still complying with regulations. This could make it easier for SMEs to use cETNs for managing their treasury and even hedging against inflation. As the market continues to change, businesses can think outside the box and explore using cryptocurrency as part of their financial strategy.
Liquidity and Efficiency
It’s expected that cETNs will make the market more liquid and efficient. When access to crypto products broadens, history has shown that spot trading often increases as well. And, as institutional interest in cETNs grows, we could see even better market dynamics. This means that SMEs involved in trading crypto might benefit from lower trading costs.
Risks to Consider
But it’s not all sunshine and rainbows for retail investors. The FCA has made it clear that cETNs are high-risk investments. There’s a real chance that investors could lose all their money. Unlike traditional products, cETNs don’t give you ownership of the underlying cryptocurrency, and they’re not covered by the Financial Services Compensation Scheme (FSCS). So, retail investors will need to be cautious and make sure they understand what they’re getting into.
Summary: The Future is Bright
Overall, the FCA's decision to lift the ban on cETNs is a turning point for the crypto market in Europe. It will open up more doors for both retail investors and crypto-friendly SMEs. As businesses start to incorporate cETNs into their operations, they will also have to keep an eye on the changing regulatory landscape and the risks involved. The future looks bright for crypto investments in Europe, with more opportunities for everyone.
