Bitcoin exchange-traded note issuers have significantly reduced their fees to as low as 0.05% following the Financial Conduct Authority's (FCA) decision to re-open access for retail investors. This policy reversal, which occurred on October 8, has triggered a highly competitive market for U.K. dominance, as described by the Financial Times.
Numerous providers have lowered their annual charges to unprecedented lows. In contrast, some other crypto-linked exchange-traded notes (ETNs) continue to charge fees as high as 2.5%. Specifically, 21Shares reduced its Core Bitcoin and Ethereum Core Staking ETPs to 0.1%, and Fidelity's Physical Bitcoin ETP now has a charge of 0.25%.
CoinShares' Physical Staked Ethereum ETP is currently offered with no management fee. This aggressive pricing strategy follows the FCA's reversal of a 2021 ban that had restricted crypto-linked funds exclusively to professional traders.
Industry Reaction and Broader Regulatory Context
Ian Taylor, a board adviser at CryptoUK, expressed his approval of the regulatory changes in discussions with media outlets. He emphasized the progress made towards adopting a more balanced approach to consumer risk within the digital asset sector.
This rule change is part of a wider initiative aimed at bolstering the United Kingdom's standing in the global landscape of cryptocurrency adoption. Industry stakeholders have recently voiced opposition to proposals from the Bank of England that would have imposed stringent limits on the corporate holdings of stablecoins.
The Bank of England is currently re-evaluating its position, partly due to concerns that the United States is making faster progress in this area, especially after the passage of the GENIUS Act. Governor Andrew Bailey has adjusted his rhetoric, moving away from earlier warnings about private stablecoins posing a threat to financial stability.
Bailey has acknowledged the innovative potential of the technology and its increasing integration into the financial system. The regulatory adjustments being made in the U.K. are designed to strike a balance between ensuring consumer protection and maintaining competitiveness in the rapidly evolving digital asset market.