Key Points
- The London Stock Exchange (LSE) will begin accepting applications for Bitcoin and Ethereum exchange-traded notes (ETNs) in the second quarter of 2024.
- Crypto ETNs will be allowed for trading on the LSE for professional investors only and must adhere to anti-money laundering regulations.
The premier stock exchange of the UK, the London Stock Exchange (LSE), is preparing to accept applications related to cryptocurrency-linked exchange-traded notes (ETNs).
In a recent press release, the LSE announced it would start accepting applications for Bitcoin (BTC) and Ethereum (ETH) crypto ETNs in the second quarter of 2024.
Details and Regulations
The exact date of launch remains undisclosed, with the LSE promising to reveal it in the future. The exchange plans to process applications based on the information given in the crypto ETN factsheet.
According to the factsheet, crypto ETNs will only be permitted for trading on the LSE by professional investors. Each crypto ETN can have up to three different currency lines offered by issuers.
The factsheet also mentions that the custody of the underlying cryptocurrency for ETNs should primarily be in cold storage. The LSE did not provide more details on this but added that custodians must comply with anti-money laundering laws in areas such as the UK, EU, Jersey, Switzerland, or the US.
Following the announcement, the price of Bitcoin quickly rose above $71,000, and Ethereum exceeded $4,000. However, it is not certain whether the LSE’s announcement influenced these price increases.
Embracing Web3
This move towards embracing Web3 is not entirely new for the LSE, as it has been exploring potential applications of blockchain technology. This includes the possibility of enabling blockchain-based trading for traditional financial assets.
For example, in September 2023, the London Stock Exchange Group disclosed plans to implement blockchain-based trading for traditional financial assets. This strategic shift was motivated by the potential benefits of integrating blockchain within conventional markets.
