Digital asset ETNs to launch on the London Stock Exchange on May 28

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The London Stock Exchange (NASDAQ: LDNXF) will launch BTC and Ether exchange-traded notes on May 28 following approval by the country’s financial watchdog this month.

The Financial Conduct Authority (FCA) gave its green light for the ETNs two weeks ago. The watchdog has limited exposure to professional investors and investment firms, which aligns with its limitations on complex ‘crypto’ products.

Immediately following the FCA’s approval, the LSE announced that it would begin working on enabling the trading of the ETNs.

This week, the exchange has revealed more details about the offering, including the launch date in May.

“We have decided to launch the market in Crypto ETNs on 28 May 2024 to enable the maximum number of issuers to be present in the market on the first day of trading,” stated the bourse, which is the largest in Europe.

Interested issuers can begin submitting their applications on April 8. By April 15, all interested parties must submit a letter detailing how they intend to meet all the requirements set out on the exchange’s fact sheet.

The requirements include proof that the ETN is physically backed and non-leveraged, has BTC and ETH as the underlying assets, and maintains a publicly available market price. It must also hold the digital assets in cold storage with a custodian licensed in the United Kingdom, the European Union, Switzerland, or the United States.

Issuers must also submit their base prospectus and obtain approval from the FCA, the LSE added.

The FCA’s listing of ETNs at the LSE marks a drastic shift after it banned the product in 2021. It believes U.K. investors “should now be able to better establish whether ETNs meet their risk appetite.”

The move aligns with similar friendlier stances from regulators globally, including in the U.S., where the Securities and Exchange Commission (SEC) approved spot ETFs for BTC in January.

Bittrex Global CEO Oliver Linch believes the move has been a long time coming and that the FCA was bound to warm up to ‘crypto’ ETNs sooner or later.

“Given London’s status as a global financial hub, it was always inevitable that the FCA would have to respond at some point to the investors’ demands to access crypto investment products,” he told a news outlet.

Watch: The future of digital asset trading