[NEWS] London Stock Exchange to accept cryptocurrency ETNs; Bitcoin exceeds $72,000

The London Stock Exchange announced on the 11th that it will begin accepting listing applications for ETNs (exchange-traded notes) targeting certain crypto assets (virtual currencies) in the second quarter of this year.

Following new guidance from the FCA (Financial Conduct Authority), the exchange will begin accepting applications for Bitcoin ETNs and Ethereum ETNs.

In a statement on the same day, the FCA stated that it "does not object to requests from exchanges to list ETNs." It also explained that crypto asset ETNs are only available to institutional investors such as investment companies and credit institutions that are authorized or regulated to operate in financial markets. It indicated that it will not allow trading, saying that it is "harmful" to retail investors.

Earlier this year, a Bitcoin spot ETF was approved in the United States, and trading is about to begin in the traditional financial market in the UK as well. In January 2021, the FCA banned the sale, marketing, and distribution of crypto asset-focused derivatives and ETNs to retail investors.

The FCA plans to make it mandatory to store the targeted crypto assets in cold wallets, and has stated that issuers must submit third-party audit reports and secure regulated custodians.

While the London Stock Exchange will approve the transaction itself in light of the FCA's guidance on crypto assets, it remains cautious, stating in its Cryptocurrency ETN Approval Fact Sheet that "there is a possibility of adversely affecting the exchange's reputation."

The statement also adds that "given the nature of the product and the guidance contained in the fact sheet, the standard incorporation timeline does not apply to cryptocurrency ETNs," and that "issuers and their advisers should contact the exchange at the earliest opportunity regarding the proposed approval."

Bitcoin hits new high again

Following the announcement by the London Stock Exchange and others, the price of Bitcoin rose to an all-time high of $72,000 (approximately 10.6 million yen), and Ethereum also surpassed the $4,000 mark (approximately 580,000 yen). Both hit new highs in Japanese yen terms, and Ethereum is expected to hit new highs in dollar terms as well.

The SEC approved a physically backed Bitcoin spot ETF in January, but has postponed a decision on an Ethereum spot ETF. The SEC has yet to decide whether Ethereum qualifies as a security, so the realization of a physical ETF remains unclear.

Reference: Announcement
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