London Stock Exchange Accepting Crypto ETN Applications, FCA Remains Cautious
The London Stock Exchange has announced that it will start accepting applications for bitcoin and ether exchange-traded notes (ETNs) in the second quarter of 2024. However, European product providers believe that it is unlikely that the Financial Conduct Authority (FCA) will approve these products for UK retail investors.
Positive Step But Marginal
Coinshares, a crypto asset management firm, sees the acceptance of crypto ETN applications as a positive step, albeit a small one. While these products have been successful on European exchanges, such as Xetra, Six Switzerland, and Euronext Amsterdam and Paris, the FCA’s position on them remains unchanged.
FCA Remains Out of Step?
Some industry experts believe that the FCA is out of step with other countries when it comes to allowing retail investors access to regulated listed products for digital assets. While the FCA has been cautious about crypto investments due to their volatility and unpredictability, critics argue that UK residents are forced to use unregistered exchanges to invest in digital assets while other investors can access regulated products.
Unlikely Approval in 2024
It seems highly unlikely that crypto ETNs and ETPs will be approved for UK retail investors in 2024 or the near future. Despite lobbying efforts over the years, the FCA has not lifted its ban on these products while they thrive in other parts of Europe.
UK Crypto Hub Status is Questionable
In 2022, the UK government announced plans to make Britain a global hub for crypto asset technology and investment. However, industry experts question how the UK can claim this status while not allowing crypto ETP issuers to promote their products to retail investors like other countries do.
Hot Take: FCA’s Conservative Stance Hinders UK Retail Investors
The London Stock Exchange’s acceptance of crypto ETN applications is a positive step towards mainstream adoption of digital assets. However, the FCA’s reluctance to approve these products for UK retail investors puts the country at a disadvantage compared to other regions. While the FCA remains cautious about the volatility and potential harm of crypto investments, it is essential to find a balance that allows retail investors access to regulated products while also protecting them from risks. By embracing innovative financial instruments like ETNs, the UK can foster a thriving crypto market and establish itself as a true crypto hub.
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