BlackRock, the world’s largest asset management firm, has received approval from the Financial Conduct Authority (FCA) to operate as a registered crypto asset firm in the United Kingdom. This approval allows BlackRock to support its only client, iShares Digital Assets AG, in managing crypto-related exchange-traded products (ETPs). These products offer exposure to specific cryptocurrencies and are backed by the underlying assets. The firm’s role is highly restricted, with activities limited to facilitating transactions for ETP subscriptions and redemptions, selling digital assets for fiat currency, and converting digital assets into fiat during early redemptions of the ETP. However, BlackRock is not allowed to onboard new clients for this service without written permission from the FCA, and is prohibited from operating automated machines for fiat-to-crypto conversions or holding client funds.
Market observers have suggested that BlackRock’s approval could potentially pave the way for the expansion of its iShares Bitcoin ETP to the UK. Last month, the firm launched its iShares Bitcoin ETP for European users via the Euronext exchanges in Paris, Amsterdam, and Germany’s Xetra exchanges. This product, aimed at institutional and knowledgeable retail investors, provides secure and regulated access to Bitcoin through traditional stock exchanges. The ETP has a temporary fee waiver that reduces its total expense ratio to 0.15% until the end of the year, and is denominated in US dollars and backed by Bitcoin held in offline cold storage by Coinbase.
It is important to note that BlackRock is not allowed to operate automated machines for fiat-to-crypto conversions or hold client funds as part of its registered crypto asset firm activities. The firm is also restricted from onboarding new clients for this service without written permission from the FCA. The approval from the FCA to operate as a registered crypto asset firm in the UK is a significant milestone for BlackRock, marking its continued expansion into the digital asset space over the past year. With this approval, BlackRock joins a growing list of regulated companies in the region, including Coinbase and Kraken, further solidifying its position in the crypto asset market.
Overall, BlackRock’s approval from the FCA to operate as a registered crypto asset firm in the UK opens up opportunities for the firm to expand its offerings in the digital asset space. The firm’s role is limited to supporting its only client, iShares Digital Assets AG, in managing crypto-related exchange-traded products, and conducting restricted activities such as facilitating transactions for ETP subscriptions and redemptions. While BlackRock is not permitted to onboard new clients for this service without written permission from the FCA, the approval positions the firm among a select group of regulated companies in the region, indicating its commitment to the digital asset market.
In conclusion, BlackRock’s approval to operate as a registered crypto asset firm in the UK marks a significant step in the asset manager’s expansion into the digital asset space. The approval allows BlackRock to support its client, iShares Digital Assets AG, in managing crypto-related exchange-traded products, with activities limited to facilitating transactions for ETP subscriptions and redemptions. While the firm is restricted in certain activities and prohibited from onboarding new clients without FCA permission, the approval positions BlackRock among a growing list of regulated companies in the region, solidifying its presence in the crypto asset market and opening up opportunities for potential expansion of its offerings.
