21Shares Calls for Standardized Regulations for Crypto in UCITS Funds
21Shares, a leading crypto investment firm, has urged the European Securities and Markets Authority (ESMA) to establish standardized regulations for incorporating cryptocurrencies into UCITS (Undertakings for Collective Investment in Transferable Securities) funds. In a statement released on Oct. 7, the firm highlighted the lack of consistency in the current approach, causing confusion for retail and institutional investors across Europe.
The firm pointed out that while some countries like Germany and Malta allow UCITS funds to include crypto assets, others such as Luxembourg and Ireland do not. Mandy Chiu, Head of Financial Product Development at 21Shares, emphasized that this fragmented approach limits retail investors’ ability to fully capitalize on the potential of cryptocurrencies. Chiu stated, “By providing a consistent set of rules across Europe, ESMA could open up new avenues for investors to diversify and enhance their portfolios in a regulated environment designed for investor protection.”
Chiu also highlighted that clear and consistent rules would not only help stabilize markets but also foster growth in the crypto sector. Therefore, the firm has urged ESMA to create comprehensive guidelines that would allow for indirect exposure to cryptocurrencies across all EU member states, ultimately protecting investors and expanding access to crypto investments.
This call for regulatory clarity comes at a crucial time as ESMA reviews feedback from its recent consultation on including new asset classes, including cryptocurrencies, in UCITS funds.
MiCA’s Impact on the European Crypto Market
The request from 21Shares aligns with the European Union’s gradual implementation of the Markets in Crypto Assets (MiCA) regulation. MiCA marks a significant milestone as the EU becomes the first major region to introduce a comprehensive legal framework for cryptocurrencies. The regulation aims to establish a uniform rulebook for digital assets that balances user protection with fostering innovation in the sector.
Under MiCA, crypto service providers must obtain authorization from one of the EU’s national financial regulators to operate within the bloc. This regulation has already had an impact on the stablecoin sector, with firms like Coinbase announcing plans to delist stablecoins that do not meet the EU’s regulatory requirements by the end of 2024. Crypto exchanges are also aligning their policies with MiCA guidelines, while UCITS funds lack such regulatory clarity.
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Original Article: 21Shares Calls for Standardized Regulations for Crypto in UCITS Funds
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