The UK has opened the door to crypto exchange-traded notes (ETNs) to retail investors — a market previously limited to professional traders — sparking a price war among issuers vying for market share, the Financial Times reports.
ua report published on Thursday, the FT said several Bitcoin ETN issuers had cut their fees to as low as 0.05%, describing the resulting competition as a “brutal battle” for investors. Meanwhile, other crypto-linked ETNs continue to charge annual fees of up to 2.5%.
The fee war follows the Financial Conduct Authority’s (FCA) decision to lift its ban on retail access to crypto-linked funds from 2021, a change that came into force on 8 October.
At the time of the policy reversal, Ian Taylor, an advisor to the board of trade association CryptoUK, told Cointelegraph: “We are pleased to see this reversal,” noting “the progress we have made towards introducing a more proportionate approach to consumer risk.”
Among the newly available ETNs are 21Shares’ Core Bitcoin and Ethereum Core Staking ETPs, which have had fees cut to 0.1%; Fidelity’s Physical Bitcoin ETP, Now Charges 0.25%; and CoinShares’ Physical Staked Ethereum ETP, which currently carries no management fee.
Related: UK toughens up: Hundreds of crypto exchanges hit by FCA warnings in October
The UK is lagging behind in cryptocurrency adoption
The FCA rule change is also part of a wider effort to revive the UK’s weak position in the global adoption of cryptocurrencies.
One of the key flashpoints was the treatment of stablecoins after industry players resisted Bank of England (BoE) proposals to impose strict limits on corporate holdings.
According to Bloomberg, the BoE is now considering softening its stance amid growing concerns that the United States is pulling back on progress after passing the GENIUS Act, which aims to provide clearer rules for stablecoin issuers.
BoE Governor Andrew Bailey has also softened his tone in recent months, backing away from earlier warnings that a private stablecoin could pose a threat to financial stability. Instead, he recognized the potential of technology for innovation and its growing role within the financial system.
Related: Coinbase hits back at UK lobbying efforts in scathing op-ed
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