Introduction
Crypto ETNs are gaining traction in the UK, but new ISA rules are creating more questions than answers.
In a surprise move, the UK government recently announced that crypto exchange-traded notes (ETNs) will be permitted within Innovative Finance ISAs (IFISAs) starting in 2026.
However, they will not be allowed in the more popular Stocks and Shares ISAs, despite increasing retail demand.
This decision has sparked industry backlash, with major investment platforms and policy experts labelling the approach “confusing,” “overly complex,” and “a missed opportunity” for mainstream crypto adoption.
The information provided on this page and throughout the website is for general information purposes only and does not constitute financial advice. It is important that you conduct your own research and consider your own personal circumstances before making any investment decisions.
As the government promises to “keep the rules under review,” investors are left wondering:
What exactly are crypto ETNs?
Why are they excluded from Stocks and Shares ISAs?
Will they ever be added to SIPPs or other investment wrappers?
In this article, we’ll break down what you need to know – from the basics of crypto ETNs to what the new rules mean for UK savers in 2025 and beyond.
What is a crypto ETN?
A Crypto ETN (Exchange-Traded Note) is a type of exchange-traded product that gives investors exposure to the price of a cryptocurrency, like Bitcoin or Ethereum, without needing to own or store the actual coins.
Unlike ETFs, which hold a basket of assets, ETNs are unsecured debt instruments issued by financial institutions. When you buy a crypto ETN, you’re essentially betting on the future price of the underlying asset, and the issuer promises to pay you that return (minus fees).
The key appeal?
You can gain crypto exposure through your brokerage account, just like buying a stock or ETF, with no wallets, private keys, or crypto exchanges involved.
📌 Key Features of Crypto ETNs::
- Exchange-traded – buy and sell on major stock exchanges just like shares or ETFs
- Crypto exposure – track the performance of cryptocurrencies like Bitcoin or Ethereum
- No wallet needed – avoid dealing with private keys or crypto exchanges
- Regulated structure – issued by financial institutions and listed under EU/UK rules
Crypto ETNs are particularly popular in Europe, where regulated issuers like 21Shares and VanEck offer Bitcoin and Ethereum ETNs listed on major exchanges such as Xetra or Euronext. They’ve become one of the most convenient, regulated, and tax-efficient ways to access crypto, especially for traditional investors who prefer listed securities over direct coin ownership.
But despite their growing popularity, they’ve been banned in UK retail portfolios since 2020… until now.
Let’s look at what’s changed, and why the government’s new approach has left many scratching their heads.
Why can’t crypto ETNs be held in Stocks and shares ISAs?
Despite the growing interest in digital assets, crypto ETNs are currently only permitted within Innovative Finance ISAs (IFISAs), a niche product that accounts for a tiny fraction of the UK’s tax-free savings landscape.
Under current HMRC rules, Stocks and Shares ISAs are restricted to listed securities and regulated collective investments.
While crypto ETNs meet some of those criteria, the government has decided to limit their inclusion to IFISAs for now, citing concerns around volatility, investor protection, and the need for further market maturity.
This has triggered frustration across the investment industry. Many argue that crypto ETNs are already exchange-traded, institutionally issued, and eligible under broader ISA legislation, meaning that restricting them to IFISAs adds unnecessary complexity.
Others point out that very few platforms even offer IFISAs, making the new rule a theoretical win with little real impact for everyday investors.
According to HMRC, any crypto ETNs mistakenly placed in a Stocks and Shares ISA before April 6, 2026, will be reclassified as qualifying IFISA assets – provided the firm offering the ISA gets approval to operate under IFISA rules. But until the government expands access, most investors won’t be able to hold crypto ETNs in their regular investment ISAs despite growing demand.
What about SIPPs and pension accounts?
While crypto ETNs are currently locked out of most ISAs, the rules around self-invested personal pensions (SIPPs) are more flexible. Several SIPP providers already allow exposure to crypto-linked ETNs, particularly those listed on regulated European exchanges like the Frankfurt or Amsterdam stock exchanges.
This is because SIPPs, unlike ISAs, do not have the same strict definition around what constitutes a “qualifying investment.” As long as the ETN meets basic regulatory and exchange-listing criteria, it can typically be added to a SIPP, although not all pension platforms offer this option.
This makes SIPPs a more accessible route for UK-based investors who want long-term crypto exposure in a tax-efficient wrapper. However, it also shifts the burden of due diligence onto the investor. Unlike ISAs, SIPPs often involve more complex fees, setup requirements, and fewer consumer protections, especially when crypto-related products are involved.
Still, the SIPP route is gaining traction among more experienced investors who understand the risks and want to integrate Bitcoin or Ethereum exposure into a broader retirement strategy. It’s also a space regulators are watching closely, as the boundaries between traditional finance and crypto continue to blur.
Some SIPP providers already allow crypto-linked ETNs. But it’s not universal, availability varies by platform, and it’s important to check what each one permits.
🔍 Key points on crypto ETNs in SIPPs
Permitted by some providers, but not all - always check your SIPP platform.
Must be exchange-listed on a recognised stock exchange (e.g., Xetra, Euronext).
No minimum investment - just start with the price of one share
A “set-it-and-forget-it” experience with index-tracking funds
For more experienced investors, SIPPs may offer a workaround to hold crypto ETNs within a pension structure. But the extra flexibility comes with added responsibility. As always, careful research and platform comparison are essential.
Check out our reviewed investing platforms!
The information provided on this page and throughout the website is for general information purposes only and does not constitute financial advice. It is important that you conduct your own research and consider your own personal circumstances before making any investment decisions.
Industry backlash: Is the government overcomplicating crypto ETNs?
The government’s decision to only allow crypto ETNs in Innovative Finance ISAs, and not Stocks and Shares ISAs, has sparked frustration across the investment industry.
Several policy directors from investment firms, consultancies, and trade bodies have voiced concern, calling the decision “ludicrously complex.”
While some have already written to City Minister Lucy Rigby, others are reportedly preparing formal letters to express disapproval.
Why the criticism?
🔄 Complexity over clarity
Critics argue the move creates unnecessary red tape and confusion, especially since crypto ETNs are technically already eligible under existing ISA rules.
📉 Lack of access for mainstream investors
Limiting access to the least-used ISA wrapper (Innovative Finance ISA) significantly reduces investor reach.
⚖️ Inconsistent regulation
Some say that if crypto ETNs meet the existing eligibility criteria for Stocks and Shares ISAs, there’s no need to involve further HMRC rule changes.
🧱 Added bureaucracy
Platforms will need to get HMRC approval to offer these ISA accounts, raising barriers for adoption and creating operational delays.
Industry insiders warn that this cautious approach could undermine retail adoption and stifle innovation in the UK’s regulated crypto market. And with consumer understanding already a challenge, some feel the government is missing a key opportunity to make the space more accessible—not less.
Conclusion & key takeaways
The inclusion of crypto ETNs in the UK ISA system should have marked a milestone for regulated access to digital assets. But by limiting them to the Innovative Finance ISA, the government has added more questions than clarity.
While some investors may explore holding crypto ETNs via SIPPs, and others might wait for broader inclusion in Stocks and Shares ISAs, the current situation underscores a common theme in crypto regulation: progress, but wrapped in complexity.
💭 Key takeaways to remember:
As the debate continues, UK investors should focus on staying informed and using the tools currently available to them. Whether through pensions, diversified ETF holdings, or cautious steps into regulated crypto exposure, the key is balancing innovation with long-term financial goals.
We’ll be watching closely for updates, and you can always visit our Knowledge Hub for fresh insights on the evolving investment landscape.
