Crypto Exchange-Traded Products Will Be Launched On May 28 In UK

Key Points:

• The UK’s FCA approved WisdomTree Inc. to list crypto exchange-traded products on the London Stock Exchange, starting May 28, for professional investors only.
• The move aligns the UK with other financial centers in digital assets, though it maintains stricter rules compared to the US market.

According to Bloomberg, the UK’s financial regulator has approved the first cryptocurrency exchange-traded products, marking a milestone in incorporating digital assets into UK financial markets.

FCA Approves First Crypto Exchange-Traded Products for UK Market

The Financial Conduct Authority cleared WisdomTree to list two physically-backed crypto exchange-traded products (ETPs), one each tracking Bitcoin and Ether, on the London Stock Exchange. Trading is expected to begin on May 28.

This will have Bitcoin and Ether held in the crypto exchange-traded products but will only be allowed to market them to professional investors as per the FCA stance that crypto derivatives pose significant risks to retail consumers. This cautious approach contrasts with the US, where the Bitcoin ETFs cleared in January have raked in nearly $59 billion in assets, significantly outpacing similar products in Europe.

Institutional Interest Grows Amid Stricter UK Crypto Regulations

WisdomTree is joined by 21Shares, which has also received approval for the listing of its crypto ETPs on the London Stock Exchange. Other issuers, including ETC Group and CoinShares, filed for the listing of their crypto products, although applications are still awaiting a decision. The FCA website listed approvals for WisdomTree, 21Shares, and Invesco Digital Markets Plc as of Wednesday, the deadline for the first day of trading.

Although crypto exchange-traded products have been trading on other European exchanges for years, the UK’s move to approve such products brings it in line with other major financial centers like the US and Hong Kong, which have done so. However, investor response in markets like Hong Kong has been lukewarm.

The FCA green light might attract institutional investors, as more than 900 institutional investors have taken stakes in US-listed Bitcoin ETFs.