Director of Kraken UK, Bivu Das, calls for the introduction of a Bitcoin ETF in the United Kingdom. Speaking at the Digital Asset Summit in London, Das stated that BTC-ETFs, limited in the UK, could offer investors a decent return.
“Britain has always said it wants to be a crypto hub. And this is one of the fundamental principles that potentially fit that definition,” Das said. He added that restrictions on this product in the UK could lead investors to seek them in unregulated jurisdictions, which could be risky for both them and the UK.
Bitcoin ETFs allow investors to access the value of Bitcoin (BTC) without necessarily owning the cryptocurrency directly.
Exchange-traded funds (ETFs) are traded on organized stock exchanges, and their value correlates with the value of the underlying asset.
In 2021, the UK Financial Conduct Authority (FCA) banned the retail sale of derivative instruments on digital assets, including exchange-traded products (ETPs) backed by cryptocurrency.
However, Das argues that since then, the financial landscape has changed dramatically in terms of regulation. He stated that Bitcoin ETFs could reduce regulatory issues since investors do not directly own the underlying asset.
Will the FCA open up to crypto ETFs? Recently, the UK approved the launch of cryptocurrency exchange-traded notes (ETNs), but they will only be available to institutional investors, not for retail trading. This differs from Bitcoin ETFs in the US, which are available to anyone.
Observers believe this move signals the FCA’s openness to allowing recognized investment exchanges to list these products for trading. However, the regulatory body remains cautious, warning that retail investors may face significant risks associated with crypto derivatives and ETNs.
Das noted that the widespread adoption of ETFs in the US following SEC approval in January legitimized Bitcoin in the cryptocurrency market, expanding its acceptance among institutional investors.
Daniel Seifert, CEO of Coinbase UK, supports Das’s idea of introducing BTC-ETFs in the UK, stating that it’s better when consumers have more options.
Currently, the FCA is facing the need to balance between promoting innovation in the crypto space and protecting retail investors from potential harm.
But with the recent influx of investments in crypto ETFs characterized by billion-dollar net inflows, interest in expanding access to cryptocurrency investment products is growing.