London Stock Exchange Will Launch Bitcoin and Ethereum ETNs, What Are They?

Liputan6.com, Jakarta The London Stock Exchange (LSE) has announced its plans to launch exchange-traded notes (ETNs) for Bitcoin (BTC) and Ethereum (ETH) on May 28, providing investors with an investment product that tracks the performance of these cryptocurrencies.

Reporting from Yahoo Finance, Thursday (28/3/2024), exchange-traded debt securities (ETN) are a type of unsecured debt security that tracks an underlying securities index and is traded on major exchanges like shares.

ETNs are similar to bonds but have no interest payments. In contrast, ETN prices fluctuate like stocks.

Applications for crypto ETNs can be submitted starting April 8, and successful funds are expected to be registered in the following month, subject to approval from the country's Financial Conduct Authority (FCA).

To be considered, issuers must submit a draft prospectus and letter explaining compliance with the ETN requirements by April 15.

To gain approval, crypto ETNs must be physically backed, have no leverage, have reliable value based on the underlying market price, and be denominated only in BTC or ETH.

Additionally, the underlying assets must be held in cold storage by a custodian licensed under Anti-Money Laundering regulations in the UK, European Union or United States.