The FCA has proposed letting authorised UK investment funds put up to 10% of their assets into crypto ETNs, with the consultation open until 13 July 2026. Here's what the change could mean for ordinary investors.
Important Risk Warning
This is not financial advice. Cryptocurrency investments are highly volatile. The value of your investment can go down as well as up, and you could lose all the money you invest. Don't invest unless you're prepared to lose all the money you put in.
London — The Financial Conduct Authority proposed on 9 June 2026 to let authorised UK investment funds hold up to 10% of their assets in crypto exchange-traded notes, according to the regulator's latest quarterly consultation paper, reported by CoinDesk and The Block. It's the first time mainstream UK fund structures — the kind that sit inside ordinary pensions and stocks and shares ISAs — would be allowed any crypto exposure at all.
For UK investors, this is the quiet sort of announcement that ends up mattering far more than a price rally. If the proposal goes through, the fund your workplace pension drips into every month could, in principle, carry a slice of bitcoin or ether exposure without you ever opening a crypto exchange account.
Under the proposal, authorised funds — including UCITS schemes and most non-UCITS retail schemes (NURS) — could allocate up to 10% of scheme property to crypto ETNs. Direct ownership of cryptoassets stays off the table; funds would get their exposure through listed notes rather than holding coins themselves.
Not every structure makes the cut. Long-term asset funds and NURS operating as alternative investment funds would be excluded entirely, The Block reported. And at the other end of the spectrum, qualified investor schemes — restricted to professional clients and sophisticated investors — would face no cap at all.
The consultation runs for five weeks, closing on 13 July 2026.
The ceiling isn't arbitrary. According to the consultation paper, a higher limit would force funds into reclassification as mass-market investments subject to stricter restrictions, which would complicate how they're distributed to retail customers. So 10% is less a judgement about crypto's riskiness and more a line drawn to keep the paperwork manageable — which, honestly, tells you a lot about how UK fund regulation actually works.
There's a longer arc here too. The FCA lifted its ban on retail access to crypto ETNs in October 2025, and physically-backed products from 21Shares, Bitwise, WisdomTree and BlackRock began trading on the London Stock Exchange almost immediately. Letting funds buy the same instruments is the logical next step, and it lands just as the FCA prepares to open its authorisation gateway for crypto firms on 30 September 2026.
Nothing changes today. The proposal has to survive consultation first, and even then, fund managers have to actually want the exposure. Plenty won't.
But the direction matters. A 10% allowance inside UCITS funds puts crypto ETNs in front of asset managers running money for millions of UK savers. Some multi-asset funds will take a 1–2% position and call it diversification. Others will use the full allowance and market themselves on it. Either way, you may end up holding crypto exposure through a fund without choosing it directly — so it's worth reading your fund's factsheet updates over the next year rather than binning them unread.
One thing to keep in view: an ETN is a debt instrument tracking a price, not the asset itself. The FCA's risk warnings on cryptoassets still apply, and a fund's 10% sleeve can fall as fast as the underlying market does.
Feedback is due by 13 July 2026, and the FCA will then decide whether to take the rule forward as drafted, adjust the ceiling, or widen the list of excluded structures. Watch for the policy statement later this year — and for which big asset managers move first if the door opens. That, more than the rule itself, will determine whether crypto exposure becomes a normal line item in British portfolios or stays a niche curiosity.
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