EU Considers Crypto Integration in $12.88 Trillion Mutual Fund Framework
The European Union is considering a major financial shift by contemplating the inclusion of crypto assets in its $12.88 trillion UCITS mutual fund framework.
This could reshape investment trends in Europe, potentially rivaling US Bitcoin exchange-traded funds.
ESMA has launched a comprehensive review to expand UCITS’s eligible assets to include cryptocurrencies, seeking insights from industry stakeholders on risks and rewards. Global financial markets are gradually embracing cryptocurrencies, evidenced by recent Bitcoin ETF approvals in the US and Hong Kong.
ESMA’s proactive stance aims to address concerns about investor protection under unchanged EAD rules since 2007. Unlike the US, where ETFs require individual approvals for specific assets, UCITS funds could potentially cover multiple cryptocurrencies without separate authorizations.
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With over five trillion euros invested in UCITS equity assets across Europe, significant changes are expected in the crypto market dynamics. Challenges loom, particularly regarding custody, as crypto assets demand specialized safekeeping arrangements. The EU is responding through the development of the MiCA regulation, which sets strict rules for asset segregation and safekeeping.
Stakeholder feedback is crucial as ESMA seeks to align policy updates with UCITS’s core goal of investor protection. The ongoing review, open for comments until August 7, 2024, will determine the eligibility of cryptocurrencies under UCITS. Additionally, ESMA’s efforts to broaden asset classes and standardize definitions aim to ensure consistency across the EU’s financial landscape.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
