BlackRock has received approval from the Financial Conduct Authority (FCA) to function as a registered crypto asset firm in the United Kingdom.
This approval positions BlackRock, the largest asset management firm globally, alongside a growing roster of regulated entities in the area, including Coinbase and Kraken.
This achievement also signifies an important advancement in the asset manager’s ongoing foray into the digital asset market over the past year.
What activities is BlackRock authorized to perform?
According to the FCA’s official site, the registration enables BlackRock to assist its sole client, iShares Digital Assets AG, in managing crypto-related exchange-traded products (ETPs).
These products offer investors exposure to specific cryptocurrencies and are supported by the underlying assets. However, BlackRock’s responsibilities are notably limited and tailored to a specific set of services.
The firm is authorized to engage in the following activities:
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Facilitate the execution of crypto asset transactions to support ETP subscriptions and redemptions between the issuer and designated authorized participants.
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Sell digital assets in exchange for fiat currency to cover operational costs for itself and service providers of the issuer.
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Convert digital assets into fiat during early ETP redemptions.
Conversely, BlackRock cannot take on new clients for this service unless it obtains prior written consent from the FCA.
Moreover, the firm is restricted from operating automated machines that facilitate conversions between fiat and crypto or the other way around. It is also not permitted to hold or manage client funds.
iShares Bitcoin ETP
Analysts have suggested that this approval might enable the firm to broaden its iShares Bitcoin ETP’s reach to the UK market.
Last month, BlackRock introduced its iShares Bitcoin ETP for European users via Euronext exchanges in Paris, Amsterdam, and Germany’s Xetra exchanges.
This product caters to institutional and knowledgeable retail investors, providing a secure and regulated path to Bitcoin through conventional stock exchanges.
The ETP currently enjoys a temporary fee waiver, lowering its total expense ratio to 0.15% until the year’s end. It is denominated in US dollars and secured by Bitcoin, which is held in offline cold storage.
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