London Stock Exchange to List Crypto ETPs Amid Regulatory Shift

In a significant move for the cryptocurrency market in the United Kingdom, the London Stock Exchange (LSE) is set to list crypto exchange-traded products (ETPs) for the first time. This development follows the Financial Conduct Authority’s (FCA) adjusted regulatory stance, which now allows the listing of such products specifically for professional investors.

WisdomTree, a New York-based firm, and 21Shares from Zurich, are among the first to gain approval to list their crypto ETPs. WisdomTree’s Physical Bitcoin (BTCW) and Physical Ethereum (ETHW) ETPs are slated to begin trading on May 28. Similarly, 21Shares has received the nod for its bitcoin (BTC) and ether (ETH) products, with trading expected to commence around the same date.

The decision by the FCA marks a pivot from its previous ban on crypto derivatives, including ETPs, introduced in January 2020. While retail investors are still excluded under the current framework, professional investors will now have the opportunity to engage with these products on a regulated platform. This change aligns the UK more closely with other European countries and follows the U.S.’s approval of spot bitcoin exchange-traded funds earlier this year.

Both WisdomTree and 21Shares were part of the group that received approval for spot ETFs in the U.S. in January, highlighting their established presence in the global market. The FCA’s revised approach reflects a broader trend of integrating cryptocurrency within regulated financial markets, considering the widespread availability and acceptance of these products across Europe.

WisdomTree has announced that its products will carry fees of 35 basis points. However, 21Shares has yet to disclose the fees for its ETPs. The LSE confirmed it would start accepting applications for bitcoin and ether products in the second quarter, emphasizing its readiness to support the burgeoning crypto ETP market.

Despite the progress, firms like Invesco, based in Atlanta, Georgia, have remained more reserved, with no further comments following the approval of their prospectus.

This landmark decision by the FCA and LSE could potentially open new avenues for professional investors in the UK, offering them regulated opportunities to invest in the crypto market. It represents a cautious yet optimistic integration of cryptocurrency into the mainstream financial ecosystem.