The London Stock Exchange has announced that it will commence trading exchange-traded notes (ETNs) for Bitcoin and Ethereum starting in May. This move marks a significant step in integrating digital currencies into the U.K.’s financial market.
Starting April 8, the London Stock Exchange (LSE) will start accepting applications for listing cryptocurrency exchange-traded notes (ETNs). This announcement follows a prior one from the Exchange and represents an important milestone in the U.K.’s financial landscape.
After the applications are received in April, the LSE plans to commence trading crypto ETNs on May 28, subject to approval from the Financial Conduct Authority (FCA). The addition of Bitcoin and Ethereum ETNs is aimed at attracting a diverse range of issuers and investors, similar to the success seen with Bitcoin ETFs in the U.S. since January.
To ensure a smooth launch, the LSE has established deadlines for issuers looking to list their securities. By April 15, they must submit all necessary documentation, including a base prospectus for approval by the FCA.
Similar to Bitcoin ETFs, ETNs are traded on a stock exchange, offering investors a regulated and easily accessible pathway to enter the crypto market. The key difference between ETNs and Exchange-Traded Funds (ETFs) lies in their structure.
ETNs are debt securities without collateral, relying on the issuer’s credit. In contrast, ETFs are funds that physically possess the assets they mirror, providing investors with direct exposure to those assets.
Consequently, ETNs carry a credit risk that ETFs do not, as the value of an ETN relies on the issuer’s ability to pay, whereas ETF values are directly linked to the assets they hold.
