Capital markets News

UK regulator green lights crypto ETNs for institutional investors

uk crypto etns

Today the UK’s Financial Conduct Authority (FCA) announced it would allow stock exchanges to list exchange traded notes backed by cryptoassets (cETNs). However, the regulator will restrict buyers to institutional investors. It continues to believe that cETNs and crypto derivatives are inappropriate for retail investors.

Many institutional investors who may want exposure to crypto don’t want to be involved in deciding the best custody route. Institutions can buy and sell ETNs just like any other security without requiring technical adaptations.

The regulator believes sufficient time has passed for exchanges to be able to assess whether they have the risk appetite for crypto securities.

Given that the UK wants to promote itself as a hub for digital assets, it’s not a surprising move. Two months after its launch in the United States, BlackRock’s IBIT spot Bitcoin ETF has achieved net assets of more than $13 billion. Crypto ETNs have been available on mainland Europe for several years. Meanwhile, Bitcoin’s price has surpassed $70,000, continuing to make all time highs.

This morning the London Stock Exchange released a notice outlining plans to accept applications for admission of Bitcoin and Crypto ETNs in the second quarter.

Update: added a link to the LSE notice

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