London Stock Exchange to Debut Crypto ETNs in May

Yulia Zakharchuk
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Julia Zakharchuk
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London Stock Exchange
Key Takeaways
  • In a landmark milestone, the London Stock Exchange (LSE) will roll out the Bitcoin and Ether ETNs market on May 28, 2024.
  • Like Bitcoin ETFs, Exchange Traded Notes will offer a more accessible and regulated way of gaining exposure to the crypto market in the U.K.

LSE to Begin Market for Bitcoin and Ethereum ETNs

LSK set to roll out Bitcoin and Ethereum ETNs.
Bitcoin and Ethereum | Source: Freepik

The London Stock Exchange (LSE) will start a market for Bitcoin (BTC) and Ethereum (ETH) exchange-traded notes (ETN) on May 28, 2024.

And would start accepting applications for crypto ETNs in Q2 of 2024. Notably, companies interested in listing their Bitcoin and Ether ETNs on the stock exchange new market can begin submitting applications on April 8.

With the launch date already set, the LSE may have ample time to meet listing requirements. 

More importantly, the necessary documents, including a prospectus requiring approval from the Financial Conduct Authority (FCA), must be prepared.

Interestingly, the home to leading blue-chip stocks would want to allow the maximum number of issuers to participate on day one of trading.

The Financial Conduct Authority (FCA) will not object to requests from Recognized Investment Exchanges (RIEs) to create a U.K. listed market segment for crypto asset-backed Exchange Traded Notes (cETNs). These products would be available only for professional investors, such as investment firms and credit institutions authorized or regulated to operate in financial markets.

FCA stated in a press release.

Issuers must submit a detailed letter and draft base prospectus by April 15, 2024, demonstrating compliance with the requirements.

Issuers who don’t meet the proper criteria or, by chance, miss the submission and approval deadlines won’t participate in the launch.

London Stock Exchange’s Bid for Profit

LSE to start market for Bitcoin and Ethereum ETNs.
London Stock Exchange | Source: Shutterstock

The London Stock Exchange (LSE) has had continuous challenges threatening its position as a top financial hub.

Bloomberg report shows that the number of companies listed on the exchange has drastically reduced.

Moreover, trading activities on the stock exchange have fallen significantly compared to pre-crisis levels.

The reasons for the decline include a shift in investor interest, regulatory landscape, and completion from other exchanges.

ETNs’ potential institutional investor interest presents an excellent opportunity for the LSE.

If the LSE successfully creates a regulated and secure cryptocurrency environment, it will attract investment.

And help the UK maintain its edge in the crypto market economy.

ETNs to Integrate Cryptos into the U.K. Financial Market

Including Bitcoin and Ether ETNs on the market will attract a broader array of issuers and investors.

The monumental move marks a significant milestone in incorporating digital currencies into the U.K. financial market.

It aims to achieve a similar stance to what Bitcoin ETFs have achieved in the United States since early January 2024.

Evidently, ETNs will be traded on the stock exchange. They provide a more accessible and regulated way to gain exposure in the crypto market.

The only difference between the two is the structure. ETNs have unsecured debt securities on the issuers’ credit.

On the other hand, crypto ETFs hold actual assets they track, providing direct exposure. This means that ETNs carry credit risks that ETFs don’t have.

The value of ETNs depends on the ability of the issuer to pay, whereas ETF’s value is directly tied to the assets they own.

Will Bitcoin and Ether ETNs on LSE become successful as exchange-traded funds?