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Crypto ETNs to Debut on the London Stock Exchange in May

Crypto ETNs to Debut on the London Stock Exchange in May

Key Takeaways

  • The London Stock Exchange announces the introduction of Bitcoin and Ether exchange-traded notes, set to launch on May 28.
  • These ETNs will be available exclusively to professional investors, adhering to strict requirements set by the Financial Conduct Authority.
  • The initiative reflects a broader movement towards incorporating digital assets into regulated financial markets, with a focus on enhancing investor protection and market integrity.

The London Stock Exchange (LSE) has announced plans to introduce exchange-traded notes (ETNs) for Bitcoin and Ether starting May 28.

These ETNs will track the performance of the cryptocurrencies and will provide a structured investment product that mirrors their market movements.

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The issuers can request applications from April 8. Those who would like to list securities on May 28 must submit a detailed prospectus and a letter explaining how they meet the requirements for consideration by April 15. The LSE encourages interested issuers to engage as early as possible to reduce the risk of delay in the admission timetable.

The approval process, overseen by the Financial Conduct Authority (FCA), mandates that the ETNs have to be non-leveraged, ensure a reliable and publicly available market price, and have BTC or ETH underlying assets.

The LSE also adds:

The underlying crypto assets must be wholly or principally held in 'cold storage' <...> and held by a custodian or custodians that are subject to AML regulation in the United Kingdom, European Union (or European Economic Area, where equivalent laws apply), Jersey, Switzerland or United States.

Issuers can admit up to three different currency lines for each crypto ETN.

However, this initiative is limited to professional investors, reflecting the FCA's cautious stance towards retail participation in crypto derivatives and ETNs, a policy enacted in January 2021.

The launch of crypto ETNs underscores the increasing recognition and integration of digital assets within regulated financial systems, marking an essential step in offering structured, secure investment opportunities in the digital currency sphere.

This initiative parallels the US Securities and Exchange Commission's recent approval of spot Bitcoin ETFs.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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