ESMA, the European Union’s security watchdog, is actively exploring the possibility of integrating cryptocurrencies into its vast €12 trillion investment products market. To gather insights, ESMA has reached out to industry experts to find out how Transferable Securities Collective Investment Undertakings (UCITS) can incorporate a range of asset classes including crypto assets, commodities, structured loans, emissions allowances and catastrophes. I asked for opinions on whether or not. Bonds, unlisted stocks, etc.
UCITS are investment funds designed to streamline and protect investment transactions and include mutual funds, exchange-traded funds, and money market funds. These funds are governed by EU regulations, but non-EU investors can also participate. Unlike spot BTC ETFs, which focus solely on cryptocurrencies, UCITS Investments includes a variety of fund types, each with its own asset allocation based on its risk profile. Even if approved, it is unlikely that there will be an independent UCITS fund with 100% allocation to cryptocurrencies. Instead, multiple UCITS funds are likely to feature a percentage allocation to crypto assets.
This move by ESMA coincides with the recent approval of spot Bitcoin exchange traded funds (ETFs) in the US and Hong Kong. Regulators around the world appear to be gradually accepting the incorporation of crypto exposure into traditional investment vehicles.
Interested parties with UCITS can submit feedback until August 7th. If approved, the inclusion of crypto assets in UCITS would be an important milestone and could establish UCITS as one of the largest mainstream investment vehicles with exposure to cryptocurrencies.
