In a significant move to streamline crypto investments in Europe, 21Shares, a leading issuer of cryptocurrency exchange-traded products (ETPs), has urged European Union regulators to establish a cohesive regulatory framework for the inclusion of cryptocurrencies in investment products. This plea comes amid rising concerns about the fragmented landscape of crypto regulations across EU member states, which has created confusion for investors.
On October 7, 21Shares made a formal request to the European Securities and Markets Authority (ESMA) to revise its rules concerning the inclusion of crypto assets within Undertakings for Collective Investment in Transferable Securities (UCITS) funds. These funds are crucial for retail investors and encompass a range of investment vehicles, including ETPs and exchange-traded funds (ETFs). The current regulatory environment varies significantly across countries, leaving investors navigating a complex web of guidelines.
A Fragmented Landscape
Germany and Malta allow UCITS funds to hold crypto, while countries like Luxembourg and Ireland impose restrictions. This inconsistency has led 21Shares to label the existing regulations as a “patchwork” that not only complicates investment strategies but also hinders retail access to digital assets. Mandy Chiu, head of financial product development at 21Shares, emphasized that the lack of uniformity creates confusion, particularly for individual investors looking to enter the crypto market.
In her statement, Chiu underscored the need for ESMA to establish clear guidelines that facilitate indirect exposure to crypto assets through ETPs. Such a framework would not only enhance investor protection but also bring Europe in line with more progressive markets like the United States and Hong Kong.
Towards a Unified Framework
The call for a unified framework is timely, as ESMA recently launched a consultation to review eligible assets for UCITS, which closed on August 7. The regulator is currently assessing feedback from this consultation to inform potential adjustments to its regulatory framework. 21Shares is advocating for swift action to create a more transparent environment for crypto investments, allowing both retail and institutional investors to navigate this evolving market with confidence.
21Shares currently offers over 40 ETPs across 11 exchanges, demonstrating its commitment to making cryptocurrency investments accessible. Notably, its US-based spot Bitcoin ETF, operated in collaboration with ARK Invest, boasts $2.64 billion in assets under management, making it the fourth-largest spot Bitcoin ETF in the United States, trailing only behind offerings from financial giants like BlackRock, Grayscale, and Fidelity.
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The Road Ahead
As the cryptocurrency market continues to gain traction among investors, the need for regulatory clarity becomes increasingly critical. A unified EU framework for crypto ETPs could not only boost investor confidence but also pave the way for innovation in the investment landscape. With 21Shares leading the charge, the hope is that European regulators will heed the call and establish a cohesive regulatory environment that aligns with the dynamic nature of the crypto economy.
In summary, 21Shares’ advocacy for a unified regulatory framework highlights the urgent need for consistency in crypto regulations across the EU. As the market evolves, clear guidelines will be essential for fostering growth, protecting investors, and ensuring that Europe remains competitive on the global stage.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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