The United Kingdom has opened up opportunities for retail investors to access crypto exchange-traded notes (ETNs), a market that was once restricted to professional traders. This shift has ignited a price competition among issuers looking to capture market share, as reported by the Financial Times.
In a report released on Thursday, the FT noted that several Bitcoin ETN providers have dramatically reduced their fees to as low as 0.05%, referring to the fierce competition as a “cut-throat battle” for investors. Meanwhile, other crypto-related ETNs are still charging annual fees of up to 2.5%.
This fee reduction follows the Financial Conduct Authority’s (FCA) decision to rescind its 2021 ban on retail access to crypto-linked funds, effective from October 8.
Upon the announcement of the policy reversal, Ian Taylor, adviser to the board at trade body CryptoUK, remarked to Cointelegraph: “We are thrilled to see this reversal,” emphasizing the “progress we’ve made toward implementing a more proportionate approach to consumer risk.”
Some of the newly available ETNs include 21Shares’ Core Bitcoin and Ethereum Core Staking ETPs, with fees lowered to 0.1%; Fidelity’s Physical Bitcoin ETP, now priced at 0.25%; and CoinShares’ Physical Staked Ethereum ETP, which currently has no management fee.
Related: UK cracks down: Hundreds of crypto exchanges hit with FCA warnings in Oct.
UK falling behind on crypto adoption
The FCA rule revision is also part of a larger effort to enhance the United Kingdom’s declining status in global crypto adoption.
A significant point of contention has been the approach to stablecoins, following industry pushback against the Bank of England’s (BoE) proposals to impose strict corporate holding limits.
According to Bloomberg, the BoE is now contemplating easing its position amid concerns that the United States is gaining an advantage with the passage of the GENIUS Act, which seeks to establish clearer guidelines for stablecoin issuers.
BoE Governor Andrew Bailey has recently softened his stance, moving away from earlier warnings that private stablecoins could jeopardize financial stability. Instead, he has recognized the technology’s potential for innovation and its increasing significance in the financial system.
Related: Coinbase turns lobbying efforts to UK in scathing op-ed
