London Stock Exchange Opens Doors to Bitcoin and Ethereum ETNs

The leading stock exchange in the United Kingdom is gearing up to initiate the acceptance of applications for exchange-traded notes tied to cryptocurrencies.

In a press release dated March 11, the London Stock Exchange (LSE) announced its plans to commence accepting applications for the admission of Bitcoin (BTC) and Ethereum (ETH) crypto exchange-traded notes (ETNs) in the second quarter of 2024. While the precise launch date remains undisclosed, the LSE intends to reveal it “in due course,” indicating that applications will be accepted following the guidelines outlined in the crypto ETN factsheet.

According to the factsheet, crypto ETNs will be eligible for trading on the LSE exclusively for professional investors and will fall under designated trading segments. Issuers will have the option to offer up to three different currency lines for each crypto ETN, as stated in the factsheet.

Furthermore, the document specifies that custody of underlying crypto assets for ETNs must primarily be in cold storage. While the LSE provides limited details on this requirement, it emphasizes that custodians must comply with anti-money laundering regulations in jurisdictions such as the U.K., E.U., Jersey, Switzerland, or the U.S.

Following the announcement, Bitcoin’s price surged above $71,000, with ETH also experiencing a significant increase above $4,000. However, it remains unclear whether the LSE’s decision had a direct impact on the appreciation of cryptocurrency prices.

For the London Stock Exchange, this latest move toward embracing the web3 landscape is not entirely unprecedented. The stock exchange has been exploring the potential applications of blockchain technology, including the prospect of facilitating blockchain-based trading for traditional financial assets, for some time. In September 2023, the London Stock Exchange Group unveiled plans to introduce blockchain-based trading for traditional financial assets, reflecting a strategic shift driven by the anticipated benefits of integrating blockchain within traditional markets.