CoinDesk
The UK's Financial Conduct Authority has proposed allowing certain retail investment funds — specifically UCITS and non-UCITS retail schemes (NURS) — to hold up to 10% of their assets in cryptocurrency exchange-traded notes. The proposal was included in the FCA's latest quarterly consultation paper and marks a meaningful step toward mainstream crypto access in the UK.
UCITS and NURS are broadly equivalent to US mutual funds: regulated, open-ended structures that pool retail investor capital into managed portfolios. The FCA cited the 10% cap as a risk-mitigation measure, writing that it "would also mitigate the risk of significant impacts arising from crypto ETN exposure."
Why it matters
The FCA only lifted its ban on retail access to crypto ETPs in October 2025, so this proposal — extending that access into pooled fund structures — represents a second and structurally larger unlock. Commentators have long argued that the UK's restrictive stance on crypto ETPs risks ceding ground to European and US peers, where similar products are already embedded in mainstream fund offerings. A 10% ceiling is conservative, but the direction of travel is unambiguous.
Market impact
For crypto ETN issuers and the broader digital-asset ETF ecosystem, UK regulatory legitimacy at the fund-wrapper level is a significant distribution unlock. UCITS structures in particular carry cross-border recognition across much of Europe, meaning approval in the UK could accelerate adoption beyond its borders. Investors should watch the consultation outcome and any FCA timeline for final rules.
Frequently asked questions
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What are UCITS and NURS, and why does their inclusion matter for crypto access?
UCITS and NURS are regulated, open-ended pooled fund structures broadly equivalent to US mutual funds. Allowing them to hold crypto ETNs puts digital-asset exposure within reach of retail investors who access markets through managed fund wrappers rather than direct brokerage accounts — a significantly larger…
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Why is the 10% cap significant rather than restrictive?
The FCA framed the 10% limit as a risk-mitigation measure for retail fund structures. While conservative, it establishes a formal regulatory ceiling inside mainstream fund wrappers for the first time, following the FCA's October 2025 lifting of the retail crypto ETP ban.
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Could UK approval of crypto ETNs in UCITS funds affect European markets?
UCITS structures carry cross-border recognition across much of Europe, meaning a UK green light at the fund-wrapper level could accelerate adoption beyond British borders and increase pressure on other European regulators to follow suit.
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