– The UK has not approved retail access to cryptocurrency exchange-traded products (ETPs)
– Countries like Australia, Brazil, Canada, and many states in Continental Europe have embraced these products
– US introduced 11 spot Bitcoin (BTC) ETFs on Wall Street
– FCA banned the sale of cryptocurrency-related “derivatives,” including ETPs, to retail investors in 2021
– Retail investors in the UK can purchase digital tokens directly from crypto exchanges or invest in shares of companies that track cryptocurrencies
– Demand for ETPs directly investing in Bitcoin from UK retail investors
– Concerns about the volatility of crypto assets, their links to financial crime, and the challenges in valuing them have been raised by the FCA.
Title: UK’s Stance on Cryptocurrency ETPs and Retail Investor Access
The UK has not approved retail access to cryptocurrency exchange-traded products (ETPs) while other global markets have embraced these products.
FCA’s 2021 Ban on Crypto Derivatives
The Financial Conduct Authority (FCA) banned the sale of cryptocurrency-related derivatives, including ETPs, to retail investors due to concerns around leveraged products and the volatility of Bitcoin.
Opposition to FCA’s Approach
Industry experts have criticized the FCA’s rule, which prohibits retail investors from accessing regulated ETPs listed on established exchanges while allowing direct investment in cryptocurrencies through crypto exchanges.
Options for UK Investors
UK retail investors seeking exposure to cryptocurrencies can purchase digital tokens directly or invest in shares of companies that track cryptocurrencies. However, there is a demand for ETPs directly investing in cryptocurrencies among retail investors.
Outlook for Change in FCA’s Stance
With the recent surge of interest in cryptocurrencies following the US launches of crypto ETPs, some believe the FCA will need to reassess its position. However, concerns about the volatility of crypto assets, financial crime links, and valuation challenges have been repeatedly raised by the FCA.
While there may be pressure for the FCA to reconsider its stance on regulated ETPs, there are also concerns about complete access for all UK retail investors and the associated risks.
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