Tech
First listing of UK crypto ETNs on the London Stock Exchange
The first crypto exchange traded notes (ETNs) in the UK have been listed on the London Stock Exchange, giving an institutional boost to the sector.
The Financial Conduct Authority (FCA) has approved cryptocurrency investment vehicles from 21shares, Invesco and Wisdomtree, marking the first UK financial regulator approval of a cryptocurrency stock.
The FCA has regularly warned about the risks of investing in volatile cryptoassets. However, in March updated his positionstating that it would “not oppose requests” to list cryptocurrency-backed ETNs.
ETNs are unsecured debt securities traded on stock exchanges that provide returns to investors based on the performance of certain types of assets.
ETNs were launched based on the value of both Bitcoin and Ethereum, the two most popular cryptocurrencies and the only two currently permitted by the FCA.
The securities are only available to professional investors.
British trade body CryptoUK said he was “pleased” that the FCA had approved these investment vehicles.
“The move is a step in the right direction for the UK, its stock markets and the government’s aspiration to secure Britain as a global cryptocurrency hub,” a CryptoUK spokesperson said.
“We would, however, reiterate that we would like to see more cryptocurrency-related instruments available to both institutional and retail investors in the UK.”
The spokesperson said the UK’s approval rate for cryptocurrency investment means the country risks “falling behind US stock markets”, which have seen significant interest in Bitcoin Exchange Traded Funds (ETFs).