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Applications for exchange-traded notes related to cryptocurrencies will soon be accepted by the primary stock market in the United Kingdom.
In a press release on March 11, the London Stock Exchange (LSE) announced that it will begin accepting applications in Q2 2024 for the admittance of Ethereum (ETH) and Bitcoin (BTC) as cryptocurrency exchange-traded notes (ETNs). While the LSE intends to reveal the precise launch date “in due course,” the exchange stated that it will accept applications in line with the information provided in the crypto ETN datasheet.
The factsheet states that only professional investors will be able to trade cryptocurrency ETNs on the LSE, and they will be classified under certain trading segments. According to the datasheet, issuers may provide up to three distinct currency lines for each cryptocurrency ETN.
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The paper further specifies that cold storage must be the primary location for the custody of the underlying cryptocurrency for ETNs. The LSE said that custodians need to follow anti-money laundering laws in countries such the U.K., E.U., Jersey, Switzerland, or the U.S., but it does not go into further detail on this topic. Following the announcement, the price of ETH surged past $4,000 while that of Bitcoin rapidly above $71,000. It’s unclear, though, if the LSE’s action affected price growth.
The paper further specifies that cold storage must be the primary location for the custody of the underlying cryptocurrency for ETNs. The LSE said that custodians need to follow anti-money laundering laws in countries such the U.K., E.U., Jersey, Switzerland, or the U.S., but it does not go into further detail on this topic. Following the announcement, the price of ETH surged past $4,000 while that of Bitcoin rapidly above $71,000. It’s unclear, though, if the LSE’s action affected price growth.
For the London Stock Exchange, the latest move toward embracing web3 is not entirely novel, as the stock exchange has been exploring blockchain technology’s potential applications, including the possibility of facilitating blockchain-based trading for traditional financial assets for some time now. For instance, in September 2023, the London Stock Exchange Group unveiled plans to introduce blockchain-based trading for traditional financial assets, citing a strategic pivot driven by the potential benefits of integrating blockchain within traditional markets.
