London Stock Exchange to Accept Bitcoin and Ether ETN Applications in Q2

Despite the optimism surrounding crypto investments, the FCA reiterated its stance on the high risks associated with digital assets and the importance of investor protection.

London Stock Exchange to Accept Bitcoin and Ether ETN Applications in Q2
Photo by David Vincent / Unsplash

The Financial Conduct Authority (FCA) has given the green light for the launch of crypto-backed exchange-traded notes (ETNs) tailored for professional investors. This move marks the latest regulatory step toward facilitating digital asset products while maintaining safeguards for retail investors.

In a statement released on Monday, the LSE stated that it would initiate the application process following a previously published factsheet. The exact launch date for the ETNs will be confirmed in due course, according to the exchange.

To expedite the admission timetable and minimize potential delays, the LSE encourages prospective issuers interested in listing Crypto ETNs to engage early in the application process. Notably, these crypto ETNs will be accessible exclusively to professional investors, in line with regulatory guidelines outlined by the Financial Conduct Authority (FCA).

While the FCA acknowledged the potential benefits of crypto ETNs for professional investors, it emphasized the need for exchanges to ensure orderly trading and investor protection. The regulator urged caution, reminding investors of the volatile nature of cryptocurrencies and the possibility of significant financial losses.

The decision by the LSE to accept applications for bitcoin and ether ETNs follows the growing popularity of U.S. spot bitcoin exchange-traded funds (ETFs) since their launch in January. As of Friday, the cumulative trading volume for U.S. spot bitcoin ETFs exceeded $100 billion, reaching $106.59 billion, as reported by Yahoo Finance data compiled by The Block.

This development increases the acceptance and integration of digital currencies into traditional financial markets, providing investors with additional avenues to access and trade crypto assets within regulated frameworks.