21Shares Calls for Unified Crypto Regulations in UCITS Funds

Standardized Regulations for Cryptocurrency in UCITS Funds

On October 7, 21Shares, a prominent crypto investment firm, made headlines by urging the European Securities and Markets Authority (ESMA) to create standardized regulatory guidelines for incorporating cryptocurrencies into Undertakings for Collective Investment in Transferable Securities (UCITS) funds.

The Current Regulatory Landscape

Currently, the regulatory environment around cryptocurrencies varies considerably across Europe. For example:

• Germany and Malta allow UCITS funds to include cryptocurrencies.
• However, Luxembourg and Ireland have different regulations that do not permit such inclusion.

This inconsistency has resulted in confusion for both retail and institutional investors, hindering their ability to make informed investment decisions.

Mandy Chiu's Perspective

Mandy Chiu, the Head of Financial Product Development at 21Shares, emphasized that this fragmented approach limits retail investors' capacity to take full advantage of cryptocurrency investments. She stated, "By providing a consistent set of rules across Europe, ESMA can open new avenues for investors to diversify and enhance their portfolios in a regulated environment designed to protect investors."

Benefits of Regulatory Clarity

Chiu further noted that having clear and consistent regulations could stabilize the cryptocurrency market and foster industry growth. According to 21Shares, a comprehensive regulatory framework would:

• Protect investors effectively.
• Broadly expand the avenues for cryptocurrency investment across EU member states.

Such a move would be significant, especially as ESMA is reviewing feedback from its recent consultations regarding the inclusion of new asset classes, such as cryptocurrencies, in UCITS funds.

Conclusion: The Need for Unified Guidelines

The call for regulatory clarity from 21Shares is timely and underscores the need for a cohesive framework that can accommodate the growing interest in cryptocurrencies among investors. Standardized regulations could not only provide a safer investment landscape but also encourage the adoption of cryptocurrencies within traditional financial products.

As the discussions continue, stakeholders are hopeful that ESMA will recognize the importance of establishing these guidelines for the benefit of all European investors.