The London Stock Exchange will begin trading in Bitcoin and Ethereum-listed bonds in May.
The London Stock Exchange (LSE) will begin accepting applications for listing virtual currency exchange-traded bonds (ETNs) from April 8th. This announcement follows on from the exchange's previous announcement and marks an important milestone in the integration of digital currencies into the UK's financial markets.
Following the April application, the LSE will begin trading in the cryptocurrency ETN on May 28, pending approval from the Financial Conduct Authority (FCA). The inclusion of Bitcoin and Ethereum ETNs is intended to attract a wide range of issuers and investors, similar to what Bitcoin ETFs have achieved in the US since January.
To ensure a smooth launch, the LSE has set deadlines for issuers wishing to list their securities. Required documents, including a basic prospectus, must be submitted by April 15 for FCA approval.
Similar to Bitcoin ETFs, ETNs trade on stock exchanges and offer investors a more accessible and regulated way to gain exposure to the crypto market. The key difference between ETNs and exchange-traded funds (ETFs) is their structure.
While ETNs are unsecured bonds backed by the credit of the issuer, ETFs are funds that hold the actual assets they track and provide direct exposure. This means that ETNs have credit risk that ETFs do not have, because an ETN's value depends on the issuer's solvency, while an ETF's value is directly tied to the assets it holds.
