As reported by the Financial Times, U.K. investors can once again hold cryptocurrency exchange-traded notes (ETNs) tax-free through a special class of individual savings account (ISA), following approval for fintech company Stratiphy to offer them in this manner. The platform enables users to customize their investment strategies and provides access to both crypto ETNs and Innovative Finance ISAs (IFISAs).
ISAs allow individuals to save up to 20,000 pounds annually without incurring income or capital gains tax on returns. While cash ISAs yield interest and stocks and shares ISAs invest in equities and exchange-traded instruments, the latest approval marks a significant development for crypto investors.
HMRC’s classification of crypto ETNs as products solely available through IFISAs from April 6 has effectively reversed last year’s decision to permit retail access to these ETNs. This change was necessary because no mainstream platforms offered such IFISAs at that time, despite some initial plans.
The restriction had previously been criticized for potentially isolating the U.K. in markets where exchange-traded products (ETPs) have broadened crypto accessibility for retail investors.
Stratiphy will provide access to three ETNs from 21Shares: those linked to bitcoin, ether, and a BTC-gold combination. The London-based platform, which commenced operations last August, manages assets totaling 4 million pounds on behalf of 2,000 clients, both retail and corporate.
CEO Daniel Gold noted, as per the Financial Times, an elevated interest in these crypto products, highlighting their potential for portfolio diversification due to their unique characteristics as a new asset class with low correlation to existing ones. Stratiphy had not responded by press time to CoinDesk’s inquiry for additional comments.