UK Opens Crypto ETN Market to Retail Investors Amid Intense Fee Competition

According to Cointelegraph, the United Kingdom has recently allowed retail investors access to crypto exchange-traded notes (ETNs), a market previously restricted to professional traders. This move has ignited fierce competition among issuers, with several Bitcoin ETN providers significantly reducing their fees to attract investors. The Financial Times reports that some issuers have lowered fees to as little as 0.05%, while others continue to charge up to 2.5% annually. This competitive landscape emerged following the Financial Conduct Authority's (FCA) decision to lift its 2021 ban on retail access to crypto-linked funds, effective from October 8. The policy change has been welcomed by industry figures such as Ian Taylor, board adviser at CryptoUK, who expressed satisfaction with the reversal and noted the progress made towards a more balanced approach to consumer risk. Among the newly accessible ETNs are 21Shares’ Core Bitcoin and Ethereum Core Staking ETPs, which have reduced their fees to 0.1%, Fidelity’s Physical Bitcoin ETP at 0.25%, and CoinShares’ Physical Staked Ethereum ETP, which currently has no management fee. This regulatory shift is part of a broader initiative to bolster the United Kingdom's position in global crypto adoption, which has been lagging. A significant point of contention has been the treatment of stablecoins, with industry participants opposing the Bank of England’s (BoE) proposals for stringent corporate holding limits. Bloomberg reports that the BoE is reconsidering its stance due to concerns that the United States is advancing with the GENIUS Act, designed to establish clearer rules for stablecoin issuers. BoE Governor Andrew Bailey has recently softened his approach, moving away from previous warnings about the potential risks of private stablecoins to financial stability. He now acknowledges the innovative potential of the technology and its increasing significance in the financial system. This shift in regulatory attitude reflects a growing recognition of the need to adapt to the evolving digital asset landscape, ensuring the UK remains competitive in the global market.