The London Stock Exchange Opens Doors to Bitcoin and Ethereum ETNs
The London Stock Exchange (LSE) has announced that it will accept listing applications for exchange-traded notes (ETNs) for Bitcoin (BTC) and Ethereum (ETH) in the second quarter of 2024. This move is a positive development for the cryptocurrency sector, which has been experiencing a surge in bullish sentiment.
The LSE’s decision requires physical support for the ETNs, with the underlying crypto assets stored in cold wallets and only available to professional investors. The exchange has shared documents stating these requirements on March 11.
In addition, the LSE has specified that the custodians for the listings must comply with anti-money laundering regulations in the United Kingdom, European Union, Jersey, Switzerland, or the United States.
ETNs are considered a milder substitute for exchange-traded funds (ETFs) and are debt securities that provide exposure to an underlying asset. Investors will be able to trade the crypto ETNs that track the performance of Bitcoin and Ethereum during the LSE’s trading hours.
Input from Finance Regulator
The UK’s Financial Conduct Authority (FCA) has stated that it will not object to requests from Recognized Investment Exchanges (RIEs) to create a market segment for crypto ETNs. The FCA will allow these exchanges to offer the products to professional investors such as authorized credit institutions and investment firms.
The FCA also encourages these exchanges to implement efficient investor protection methods and ensure compliance with ongoing disclosure requirements and prospectus regulations under the UK Listing Regime.
This decision by the LSE comes after the US Securities and Exchange Commission (SEC) approved multiple spot Bitcoin exchange-traded funds earlier this year. Approval of ETNs for Ethereum and DeFi assets in the UK could further boost the entire cryptocurrency market.
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