BlackRock approved to offer crypto services in UK, expanding digital asset footprint

BlackRock's FCA approval restricts operations to ETP support, significantly narrowing its crypto asset activities.

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

BlackRock has secured approval from the Financial Conduct Authority (FCA) to operate as a registered crypto asset firm in the United Kingdom.

The approval places BlackRock, the world’s largest asset management firm, among a growing list of regulated companies in the region, including Coinbase and Kraken.

This milestone also marks a significant step in the asset manager’s continued expansion into the digital asset space over the past year.

What is BlackRock permitted to do?

According to the FCA’s website, the registration 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. However, BlackRock’s role is highly restricted and tailored to a narrow scope of services.

The firm is permitted to conduct the following activities:

• Facilitate the execution of crypto asset transactions to support ETP subscriptions and redemptions between the issuer and designated authorized participants.

• Sell digital assets for fiat currency to cover operational expenses for itself and the issuer’s service providers.

• Convert digital assets into fiat during early redemptions of the ETP.

Meanwhile, BlackRock is not allowed to onboard new clients for this service unless it receives written permission from the FCA.

Furthermore, the firm is restricted from operating automated machines that convert fiat to crypto or vice versa. It is also prohibited from holding or controlling client funds.

iShares Bitcoin ETP

Market observers have suggested that the approval could allow the firm to expand its iShares Bitcoin ETP to the UK.

Last month, BlackRock launched its iShares Bitcoin ETP for European users via the Euronext exchanges in Paris, Amsterdam, and Germany’s Xetra exchanges.

This product is available to institutional and knowledgeable retail investors. It aims to provide 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. It is denominated in US dollars and backed by Bitcoin, which Coinbase holds in offline cold storage.

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