UK opens door for crypto in mainstream funds with new rule

The UK’s financial watchdog just gave a cautious green light to crypto in everyday investment funds. A rule change would let certain funds—like those sold to regular savers—hold up to 10% of their money in crypto exchange-traded notes, or ETNs. ETNs are like IOUs that track a crypto’s price without needing to own the actual coins. This isn’t an all-out embrace of crypto. The regulator calls it a “test run” with strict limits to keep risk in check. The funds in play are called UCITS and NURS. Think of them as big shared wallets where thousands of people pool their cash for professional management. UCITS funds are popular across Europe because they follow strict EU-style rules. NURS funds are the UK’s version—similar but not identical. Both types are open-ended, meaning people can join or leave anytime. The FCA wants these funds to dip a toe in crypto waters but not dive too deep.

Why now? The regulator first opened the door to crypto ETNs in late 2025, ending a four-year ban. That move surprised many who expected a slower approach. Now, it’s doubling down by letting mainstream funds use them too. Critics say crypto prices swing wildly, so a 10% share could still shake up a fund’s value. Supporters argue this could bring fresh money into crypto markets and help stabilize prices over time. Not everyone’s convinced. Some fund managers warn that crypto’s wild swings could spook everyday investors. Others point out that ETNs don’t give direct ownership of crypto, so investors aren’t exposed to the full risks—or rewards—of holding coins themselves. There’s also a question of timing. Crypto prices have been volatile recently, which makes regulators nervous about rushing in. Still, the UK isn’t going all-in. The 10% limit acts like a speed bump. It’s designed to protect regular investors while letting the market experiment. Whether this leads to more crypto products—or another U-turn—remains to be seen. One thing’s clear: the financial world is watching closely.

Actions