21Shares, a leading crypto investment firm, has urged the European Securities and Markets Authority (ESMA) to establish standardized regulations for incorporating cryptocurrency into UCITS funds. The firm’s statement on Oct. 7 highlighted the inconsistency in current approaches across European countries, causing confusion among investors.
Mandy Chiu, Head of Financial Product Development at 21Shares, emphasized the importance of providing a consistent set of rules to unlock opportunities for European investors. She explained that a fragmented approach limits retail investors’ ability to fully capitalize on crypto investments, hindering market stability and growth in the sector.
21Shares called on ESMA to create comprehensive guidelines allowing indirect exposure to cryptocurrencies in all EU member states, aiming to protect investors and broaden access to crypto investments.
ESMA’s review of feedback from consultations on including new asset classes, like crypto, in UCITS funds underscores the need for regulatory clarity in the rapidly evolving crypto landscape.
MiCA’s Gradual Implementation
The request from 21Shares aligns with the European Union’s gradual implementation of the Markets in Crypto Assets (MiCA) regulation. MiCA sets a precedent as the first major region with a comprehensive legal framework for crypto assets, balancing user protection with innovation.
Under MiCA, crypto service providers must obtain authorization from an EU national financial regulator to operate within the bloc, setting new standards for regulatory compliance in the industry.
Several firms, including Coinbase, have announced plans to delist stablecoins that do not meet EU regulatory requirements by the end of 2024. Crypto exchanges are already adjusting their policies to align with MiCA guidelines.
