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The European Union is contemplating a significant expansion in its financial landscape, exploring the possibility of integrating cryptocurrencies into its €12 trillion ($12.8 trillion) investment product market. The European Securities and Markets Authority (ESMA) has solicited feedback from industry experts on incorporating various asset classes, including crypto assets, into Undertakings for Collective Investment in Transferable Securities (UCITS). This move aligns with global shifts, as seen with the recent approval of Bitcoin spot ETFs in the U.S. and Hong Kong.
UCITS, a major component of Europe’s investment framework, typically includes mutual funds and ETFs aimed at safeguarding investor interests through regulated, diversified portfolios. Current EU regulations prevent standalone crypto funds, but the proposed change could allow a blend of crypto assets within the UCITS structure, broadening the horizon for traditional investors.
With a deadline set for August 7 for expert opinions, the inclusion of crypto assets could position UCITS at the forefront of mainstream, diversified investment funds. This potential pivot towards crypto comes amidst the EU’s proactive stance on stringent crypto regulations, ensuring a balanced approach to innovative investment opportunities and consumer protection.
