The first crypto exchange traded notes (ETNs) in the UK have listed on the London Stock Exchange in an institutional boost to the sector.
The Financial Conduct Authority (FCA) approved the crypto investment instruments from 21shares, Invesco and Wisdomtree, marking the first approval from the UK financial regulator of a cryptocurrency security.
The FCA has regularly warned about the risks of investing in volatile cryptoassets. However, in March it updated its position, stating it would “not object to requests” to list crypto-backed ETNs.
ETNs are unsecured debt securities traded on stock exchanges that provide returns to investors based on the performance of certain asset types.
ETNs have been 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 it was “pleased” that the FCA had approved these investment vehicles.
“The move is a step in the right direction for the UK, its equity markets and the government’s aspiration to secure Britain as a global cryptoasset hub,” said a CryptoUK spokesperson.
“We would, however, reiterate that we would like to see more crypto-related instruments available to both institutional and retail investors in the UK.”
The spokesperson said the rate of approval in the UK for crypto investments means it is at risk of “falling behind the US’ equity markets”, which have seen significant interest in Bitcoin exchange-traded funds (ETFs).
