ESMA Seeks Expert Opinion on Adding Crypto to €12 Trillion Investment Product Market
The European Union Considers Adding Crypto to $12.8 Trillion Investment Market
The European Securities and Markets Authority (ESMA) is currently seeking the opinion of experts on whether to include cryptocurrency in the 12 trillion euro ($12.8 trillion) investment product market. This move could potentially open up a new avenue for investors looking to diversify their portfolios.
The ESMA is specifically looking at whether Undertakings for Collective Investment in Transferable Securities (UCITS) can gain exposure to different asset classes, including crypto assets. UCITS are investment funds designed to simplify investing transactions and protect investors. If approved, UCITS with crypto exposure could become one of the largest mainstream funds in the market.
This request for expert opinions comes at a time when securities regulators worldwide are starting to warm up to the idea of including crypto in traditional investment vehicles. While spot Bitcoin exchange-traded funds (ETFs) have been approved in the United States and Hong Kong, UCITS investments would offer a more diversified approach with various fund types and asset allocations.
Nicolas Streschinsky, the Head of DeFi at Trilitech, believes that including a small percentage of crypto assets in UCITS funds could broaden the holder base of cryptocurrency assets. Currently, EU regulations prohibit independent crypto-centered investment products, so investors have to access them through exchange-traded notes.
The European Union has been known for its strict crypto regulatory policies, with the introduction of the Markets in Crypto-Assets Regulation (MiCA) framework. The ESMA is also seeking feedback on how adding specific cryptocurrencies to the framework would be affected by MiCA.
Overall, the potential inclusion of crypto in the UCITS market could provide investors with more opportunities to diversify their portfolios and gain exposure to this rapidly growing asset class. Stakeholders have until August 7 to submit their comments on this proposal.
