Key Takeaways
- UK regulator changed the rules in October, 2025, lifting a four-year ban on cryptocurrency ETNs in ISAs.
- From April, these assets can be held within an Innovative Finance ISA, a niche product with a very low takeup.
- Currently no UK platform offering the Innovative Finance ISA is also authorized to sell crypto exchange-traded notes.
The rules around holding cryptocurrency assets in tax-free wrappers have changed again with the start of the new 2026/2026 tax year, marking another shift in how policymakers manage retail access to the high-risk asset class.
From April 6, cryptocurrency exchange-traded notes can no longer be held in stocks and shares ISAs, a popular tax wrapper, but instead will be eligible for the less common Innovative Finance ISA.
This follows moves from the Financial Conduct Authority in October 2025, when the UK regulator allowed retail access to bitcoin and ether crypto exchange traded notes, or cETNs, with several safeguards and regulations in place to protect this investor segment. This lifted a four-year ban on access to these products, and initially following this access, investors were eligible to hold cETNs in stocks and shares ISAs.
Self-invested personal pensions or SIPPs, as registered pension schemes, also became eligible to hold cETNs from October 2025. HMRC has not announced any change to the treatment of cETNs in pensions.
And HMRC said that individuals who hold cETNs in adult or junior stocks and shares ISAs, before April 6, 2026, will be able to retain these holdings in their accounts.
What Are the Rules for Crypto ETNs?
The UK FCA allows retail investors to access crypto ETNs, provided they are traded on a UK-based investment exchange or a recognized investment exchange, such as the London Stock Exchange.
Crypto ETNs must meet the following criteria to trade on one of these exchanges:
- The underlying asset must be either bitcoin or ether.
- Products must be physically backed by the underlying cryptocurrency.
- Cryptoassets must be held in “cold storage”—that is, offline—or an equivalent secure arrangement and must be safeguarded by one or more regulated custodians.
The FCA still restricts retail access to cryptoasset derivatives. Derivatives are financial contracts that can provide leveraged price exposure to an asset.
Even though crypto ETNs held in ISAs now have regulatory oversight, there is still is no recourse if the underlying cryptocurrency collapses.
What Is the Innovative Finance ISA?
The Innovative Finance ISA is one of the four types of ISAs for adults, in addition to cash ISAs, stocks and shares ISAs, and Lifetime ISAs.
In any type of ISA, investors do not need to pay tax on interest earned from cash nor on investment income or capital gains.
Innovative Finance ISAs are designed to support more long-term, less-liquid investments and cash. Qualifying investments include peer-to-peer loans, crowdfunding debentures, alternative finance arrangements, less-liquid investments, and cash.
Launched in 2016, IFISAs are significantly less popular than other ISA types: IFISAs account for about 0.09% of the total number of adult ISA accounts subscribed to in the 2023-24 tax year. Soon after the launch of the product, the 2017-2018 tax year saw a spike in subscriptions to 49,000 but this has dwindled to just 13,000 in the the 2023-24 tax year, the last year of full available data.
Platforms that do offer IFISAs typically focus on peer to-peer lending or crowdfunding, and currently no UK platform offering the IFISA is also authorized to sell crypto ETNs.
Comparing Types of Crypto Ownership
There are several ways investors can gain exposure to cryptocurrencies: Investors can gain exposure either by owning the asset directly or by having another entity hold it on their behalf.
Currently, although thousands of active cryptocurrencies exist, in the UK, retail investors interested in gaining price exposure to crypto via an exchange-traded route can only access bitcoin or ether ETNs. However, these two coins dominate: Bitcoin remains the primary crypto asset, accounting for about 60% of global assets, while ether accounts for 10% as of mid-April 2025.
An ether or bitcoin crypto ETN offers investors price exposure to the underlying cryptocurrency, with certain benefits and drawbacks, compared with other types of ownership, such as directly holding crypto.
Pros and Cons of Investing in a Crypto ETN
Crypto ETNs offer ease of access alongside a degree of regulatory oversight compared with direct ownership of cryptoassets.
Another key benefit of crypto ETNs is the ability to hold these in ISA or SIPP accounts. Holding cETNs within tax-advantaged wrappers, such as ISAs or self-invested personal pensions, shelters any capital gains or income from tax and do not require reporting. The cETNs held outside these wrappers are subject to capital gains tax, while direct crypto holdings are also subject to capital gains tax and, in some cases, income tax, and may require self-reporting.
A key benefit of crypto ETNs is their potential tax efficiency. As of the start of the 2026/27 UK tax year, crypto ETNs eligibility moving from the stocks and shares ISA to the relatively niche Innovative Finance ISA will likely obscure this benefit for the average UK retail investor.
As well as the risk of cryptocurrency volatility, IFISAs also come without the protection offered by the Financial Services Compensation Scheme, unlike more mainstream ISAs.
Broader European Crypto ETP Landscape
UK retail access to crypto ETNs is relatively narrow to mainland Europe, in terms of cryptocurrency exposure, as well as product types. In the EU and Switzerland, retail investors are also able to access ETPs with a greater number of underlying cryptocurrencies—beyond just bitcoin and ether. And basket products give investors exposure to more than one underlying cryptocurrency.
For a complete picture of the European crypto exchange traded product landscape check out the Crypto ETPs in Europe—2026
