The United Kingdom has opened the floodgates for crypto exchange-traded notes (ETNs) to retail investors — a market that was previously limited to professional traders — sparking a price war among issuers vying for market share, according to the Financial Times.
In a report published on Thursday, the FT said several Bitcoin ETN issuers have slashed their fees to as low as 0.05%, describing the resulting competition as a “cut-throat 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 2021 ban on retail access to crypto-linked funds, a change that took effect on Oct. 8.
At the time of the policy reversal, Ian Taylor, board adviser at trade association CryptoUK, told Cointelegraph: “We are delighted to see this reversal,” highlighting the “progress we’ve made toward introducing a more proportionate approach to consumer risk.”
The Financial Conduct Authority’s roadmap for digital asset regulations. Source: FCA
Among the newly accessible ETNs are 21Shares’ Core Bitcoin and Ethereum Core Staking ETPs, which have had their fees reduced to 0.1%; Fidelity’s Physical Bitcoin ETP, now charging 0.25%; and CoinShares’ Physical Staked Ethereum ETP, which currently carries 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 change also forms part of a broader effort to revive the United Kingdom’s waning position in global crypto adoption.
One of the key flashpoints has been the treatment of stablecoins after industry participants pushed back against the Bank of England’s (BoE) proposals to impose strict corporate holding limits.
According to Bloomberg, the BoE is now considering softening its stance amid growing concern that the United States is pulling ahead following the passage of the GENIUS Act, which aims to provide clearer rules for stablecoin issuers.
BoE Governor Andrew Bailey has also moderated his tone in recent months, stepping back from earlier warnings that private stablecoins could pose a threat to financial stability. Instead, he has acknowledged the technology’s potential for innovation and its growing role within the financial system.
Related: Coinbase turns lobbying efforts to UK in scathing op-ed