FCA proposes 10% crypto ETN limit for UK retail investment funds
In brief
- FCA proposes 10% crypto ETN cap for UCITS and NURS retail investment schemes
- Proposal follows October 2025 decision lifting retail ban on crypto exchange-traded products
- 10% limit designed to mitigate cryptocurrency exposure risk in regulated funds
Crypto access for regulated funds
The FCA first allowed retail investors to access crypto exchange-traded products in October 2025, lifting a ban that had been in place since 2021. The latest proposal extends that opening by permitting UCITS and NURS to incorporate crypto exposure directly into their portfolios, subject to the 10% limit.
The regulator framed the cap as a safeguard. "Our proposed 10% limit for UCITS and NURS would also mitigate the risk of significant impacts arising from crypto ETN exposure," the FCA stated in its consultation materials.
Why ETNs matter for mainstream adoption
Investment vehicles that allow users to gain exposure to cryptocurrency without having to buy and custody the assets themselves have been at the forefront of mainstream adoption of crypto for several years. ETNs remove custody friction and regulatory complexity for institutional and retail investors alike, making crypto accessible through familiar fund structures.
Regulatory hurdles to the wider use of crypto exchange-traded products in the U.K. have drawn criticism from commentators who say it risks placing the country at a disadvantage compared to its peers. The FCA's incremental approach—first lifting the retail ban, now permitting fund-level exposure—reflects a measured stance aimed at balancing market access with investor protection.
