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The London Stock Exchange will begin trading bitcoin and ethereum exchange-traded notes in May.
Starting April 8, the London Stock Exchange (LSE) will begin accepting listing applications for cryptocurrency exchange-traded notes (ETNs). The announcement follows the Exchange's previous one and marks a major milestone in the integration of digital currencies into the UK financial market.
Following applications in April, the LSE will begin trade crypto ETN on May 28, pending approval from the Financial Conduct Authority (FCA). The inclusion of bitcoin and ethereum ETNs aims 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. Before April 15, they must submit the necessary documentation, including a base prospectus for FCA approval.
Like bitcoin ETFs, ETNs are traded on an exchange, offering a more accessible and regulated way for investors to gain exposure to the cryptocurrency market. The fundamental difference between ETNs and exchange-traded funds (ETFs) is the structure.
ETNs are unsecured debt securities backed by the issuer's credit, while ETFs are funds that hold the actual assets they track and offer direct exposure. This means that ETNs carry credit risk that ETFs do not, since the value of an ETN depends on the issuer's ability to pay, while the values of ETFs are directly linked to the assets they hold.
