UK Lifts Ban on Personal Crypto Asset Investment: 2021 Ban Officially Overturned

The UK Financial Conduct Authority (FCA) announced a major decision on October 2—lifting the ban on crypto asset exchange-traded products (ETPs) for retail investors. This means that, for the first time since 2021, UK retail investors can now legally access regulated Bitcoin and Ethereum-related products.

The Story Behind the Ban Lift

Back in 2021, the FCA imposed a ban on crypto asset derivatives and listed products to protect consumers from market volatility and fraud risks. This reversal represents the regulator’s attempt to strike a balance between investor protection and market openness.

Slow Approval Progress, but Improving Efficiency

Although the policy has been relaxed, the listing process remains bumpy. The FCA didn’t receive a single company’s prospectus until September 25, just one day before the scheduled release. The London Stock Exchange (LSE) must also reapprove all listings after the FCA review, further slowing progress.

However, there are bright spots in terms of efficiency: After internal process optimizations this year, the FCA’s average approval time has dropped from 17 months to just over 5 months, and the approval rate has risen from 15% over the past five years to 45%. Five institutions, including BlackRock and Standard Chartered, have already been approved for registration.

But the number of applications is declining—from 46 in April 2023 to 26 projected for April 2025, and actual approvals have dropped from 8 in 2022-23 to just 3 in 2024-25.

International Coordination + Stablecoin Regulation

The UK is aligning its crypto regulation with international standards. Starting January 2026, crypto firms will be required to record client information for every transaction, in line with the OECD’s global reporting framework.

At the same time, the UK and US have established the “Atlantic Transatlantic Digital Asset Working Group” (announced during Trump’s visit to London this September), aiming to strengthen cooperation on digital asset regulation.

But significant challenges remain: the Bank of England has proposed limits on stablecoin holdings—£10,000-£20,000 for individuals, £10 million for institutions. Opponents argue this would stifle innovation and harm the UK’s global competitiveness. Bank of England Governor Bailey has warned that stablecoins could undermine commercial banks’ roles in deposit-taking and credit creation.

Currently, the global stablecoin market is valued at $300 billion. The US Congress just passed the GENIUS Act this July.

Bottom Line

The FCA’s move still looks like a test run for now. Once all approvals are complete, retail investors should soon gain access to the market. This signals that the UK is heading toward a new regulatory path—one that retains oversight but is more flexible and coordinated.