Retail investors in the UK will be able to hold cryptoasset exchange traded notes (cETNs) in Individual Savings Accounts (ISAs) and registered pension schemes from next year, under new rules designed to expand access to digital assets within tax-advantaged accounts.
The Treasury on Wednesday confirmed the tax treatment of cETNs following a policy change by the Financial Conduct Authority, which from 8 October 2025 permits retail investors to buy and sell the products for the first time. The move reverses a 2020 ban that restricted the instruments to professional investors because of volatility and consumer protection concerns.
cETNs are debt securities that track the performance of specific cryptoassets such as Bitcoin or Ether. Unlike exchange traded funds, which hold underlying assets, ETNs are unsecured notes issued by banks or other financial institutions and carry counterparty risk.
What’s changed for ISA investors?
Under the new framework, cETNs will be eligible for inclusion in ISAs and registered pension schemes from 8 October 2025, marking a significant broadening of crypto exposure within mainstream investment wrappers. The change forms part of the government’s ambition to make the UK a leading hub for digital finance while maintaining investor safeguards.
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Initially, the products will qualify for inclusion in stocks and shares ISAs. From 6 April 2026, they will be reclassified as qualifying investments within the Innovative Finance ISA (IFISA), which currently accommodates peer-to-peer loans and other alternative assets. Officials said the shift would “reflect the evolving nature of digital finance” and allow regulators to monitor the market as retail participation grows.
Any cETNs held in a stocks and shares ISA before April 2026 will continue to qualify once transferred to an IFISA, ensuring a smooth transition for investors and ISA managers. The government added that it would keep the inclusion of cETNs within tax-advantaged accounts under review, with the possibility of restoring their eligibility for stocks and shares ISAs once the market matures and consumer understanding improves.
ISA managers that wish to offer cETNs will need to apply to HM Revenue & Customs for approval to operate an IFISA. The Treasury said the approach was intended to minimise operational disruption and provide continuity for savers, while giving firms time to adapt their systems and compliance processes.
UK regulatory regime for cryptoassets
The update underscores the government’s desire to balance innovation with prudence as it builds a regulatory regime for cryptoassets. “The government remains supportive of the UK’s growing cryptoasset sector and continues to develop a comprehensive framework that fosters innovation while protecting consumers,” the HMRC statement said.
The Armchair Trader welcomes the clarity but cautions that retail investors should be fully aware of the risks. cETNs can experience sharp price swings and remain exposed to issuer creditworthiness, unlike physically backed funds.
Still, the policy marks another step in bringing cryptoassets closer to the mainstream of UK savings and investment products. Whether it brings a flood of new retail money — or merely adds a high-risk option to ISAs — will depend on how much confidence investors have in digital markets after years of turbulence.
