A major UK stock exchange is set to begin accepting applications for cryptocurrency-linked exchange-traded bonds.
The London Stock Exchange (LSE) announced in a press release on March 11 that it will begin accepting applications for approval of Bitcoin (BTC) and Ethereum (ETH) cryptocurrency exchange-traded notes (ETN) from the second quarter of 2024. The exact launch date is unclear, as LSE plans to unveil it “in due course”. The exchange said it plans to accept applications according to the details included in its cryptocurrency ETN factsheet.
According to the factsheet, cryptocurrency ETNs are only permitted to trade on the LSE for professional investors and are part of a designated trading segment. Issuers can offer up to three different currency lines for each cryptocurrency ETN, the factsheet states.
The document also states that custody of ETN’s native cryptocurrency should primarily reside in cold storage. The LSE did not elaborate further on the matter, but added that custodians must comply with anti-money laundering regulations in jurisdictions such as the UK, EU, Jersey, Switzerland or the US. After this news broke, the price of Bitcoin quickly jumped to over $71,000. ETH soared above $4,000. However, it is unclear whether the LSE’s move had any impact on the price rise.
For the London Stock Exchange, the recent move towards embracing web3 is not entirely new. That’s because stock exchanges have been exploring potential applications of blockchain technology for some time, including the possibility of facilitating blockchain-based trading for traditional financial assets. For example, in September 2023, the London Stock Exchange Group disclosed plans to introduce blockchain-based trading for traditional financial assets, citing a strategic shift driven by the potential benefits of blockchain integration within traditional markets. I did.