UK Lifts Retail Ban on Crypto ETNs, Allowing Tax-Free Access via Pensions and ISAs

The U.K. officially lifted its multi-year retail ban on crypto exchange-traded notes (ETNs), saying the digital asset market has matured enough for individuals to invest through regulated products, even if investors will have to wait a little longer to add them to their portfolios.

In a policy update Wednesday, the Financial Conduct Authority (FCA) confirmed that retail investors can now buy crypto ETNs (cETNs) listed on FCA-recognized exchanges, such as the London Stock Exchange (LSE).

Crypto ETNs are exchange-traded debt notes that track bitcoin or ether prices without giving investors direct coin ownership. They fall under the umbrella of exchange-traded products (ETPs) that also includes exchange-traded funds (ETFs.)

While global ETNs typically do not require physical backing, on the London Stock Exchange, crypto ETNs must be fully physically backed by underlying assets held by regulated custodians and cannot use leverage.

While the ban officially lifted on Wednesday, there is a delay before retail investors will be able to add cETNs to their portfolios, which reports say is down to the FCA only starting to accept prospectuses for prospective products on Sept. 25.

Crypto ETNs in ISAs and pensions

The U.K. tax authority, HM Revenue & Customs, said in a policy paper published Wednesday that crypto ETNs can be held in stocks and shares Individual Savings Accounts (ISAs) and registered pension schemes — allowing investors to earn tax-free returns within those accounts.

From April 6, 2026, cETNs will be reclassified as Innovative Finance ISA (IFISA) investments, though their tax advantages will remain unchanged. Officials said the shift reflects the government’s commitment to diversifying long-term savings options and integrating digital finance into mainstream investment structures.

London Stock Exchange already lists crypto ETNs

The London Stock Exchange already lists several crypto ETNs from issuers such as 21Shares, WisdomTree and ETC Group, previously available only to professional investors. These products can now be accessed by retail investors through regulated platforms.

However, popular U.S.-listed spot crypto ETFs like BlackRock’s IBIT remain ineligible, as they trade in dollars on non-U.K. exchanges and are not recognized under FCA rules.

Major ISA providers — including IG, AJ Bell, and Hargreaves Lansdown — are expected to review the policy before enabling cETNs on their platforms. The rollout is expected to be gradual as providers adapt compliance systems and custody arrangements.