The Financial Conduct Authority (FCA) has announced that firms will soon be able to give retail consumers access to crypto exchange traded notes (cETNs) under new changes.

The regulator said that cETNs that retail consumers can access must be traded on an FCA-approved, UK-based investment exchange.

It added that financial promotion rules will also apply so consumers get the right information and aren’t offered inappropriate incentives to invest.

“Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood," said David Geale, executive director of payments and digital finance at the FCA. "In light of this, we’re providing consumers with more choice, while ensuring there are protections in place.

"This should mean people get the information they need to assess whether the level of risk is right for them.”

The Consumer Duty will apply to firms offering these products to retail investors.

However, there won’t be coverage from the Financial Services Compensation Scheme (FSCS).

The move marks the latest crypto development by the FCA, which is currently establishing a regulatory framework for digital assets.

The regulator has outlined its crypto roadmap and recently published proposals on stablecoins as well as other aspects of the regime.

The FCA’s ban on retail access to cryptoasset derivatives will remain in place.

The announcement comes after the UK watchdog proposed lifting a ban on crypto exchange traded notes (cETNs) for retail investors last month.

The move would mean that cETNs could be sold to individual consumers in the UK, rather than just professional investors, if they are traded on an FCA-approved investment exchange.

Earlier this week, former chancellor George Osborne said that the UK is being “left behind” by the government’s approach to cryptocurrency.

His comments, which were written in the Financial Times (FT) newspaper, echo those made by Riccardo Tordera, director of policy & government relations at The Payments Association, who said there is a “growing disconnect” between what current chancellor Rachel Reeves has said and the government’s current regulatory proposals.

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