The London Stock Exchange has clarified that it will accept applications for crypto ETNs, specifically for Bitcoin and Ethereum, in the latter part of 2024 if they fulfill specific guidelines.
Exchange-traded notes (ETNs) differ from exchange-traded funds (ETFs) distinctively. While the latter represent a portion of an underlying asset, exchange-traded notes are debt securities tracking assets. A few spot crypto ETFs got approvals in the US in January 2024. After a couple of months, the London Stock Exchange has also announced the start of accepting applications for crypto ETNs.
The exchange published a press release announcing their decision. At the same time, it also provided a detailed factsheet for the crypto ETNs. The Crypto ETN Admission Factsheet specifies strict guidelines for the ETNs to receive approvals from the exchange. Meanwhile, the exchange hasn’t mentioned any precise dates when it’ll start accepting applications.
The exchange mentioned that the ETNs would need to be backed physically. Its underlying assets would have to have a reliable and public market price. Finally, only Bitcoin and Ethereum must be its underlying crypto assets.
Further, the crypto assets would have to be in cold wallets. The exchange also described how only qualified and AML-regulated firms could custody the crypto assets. Another key rule is that only professionals can trade the ETNs on the London Stock Exchange.
The factsheet also said, “Issuers can admit up to three different currency lines for each Crypto ETN. These can be applied for simultaneously with the main currency line or at a later date.”
Regulators like the Financial Conduct Authority in the UK have strongly supported crypto regulations. On March 11, the regulator published its views regarding crypto exchange-traded notes. The FCA also stated it was working towards a crypto asset regulatory regime in the UK.
Willing to read more such news reports revolving around the crypto sector? Check Millionero’s blog!