EU invites stakeholders to share their views on the inclusion of cryptocurrency in the 12 trillion euro investment market.

The European Securities and Markets Authority (ESMA), the security watchdog of the European Union, is seeking expert opinions on the potential inclusion of cryptocurrencies in the 12 trillion euro ($12.8 trillion) investment product market. The ESMA has asked industry experts for their views on whether Undertakings for Collective Investment in Transferable Securities (UCITS), a market valued at 12 trillion euros, can gain exposure to various asset classes, including crypto assets. UCITS are investment funds that aim to protect and simplify investment transactions, consisting of mutual, exchange-traded, or money market funds. While these funds are regulated by EU laws, non-EU investors can also participate. Stakeholders of UCITS have until August 7 to submit their comments, and if approved, UCITS would become one of the largest mainstream funds with crypto exposure. The request for expert opinions comes as spot Bitcoin exchange-traded funds (ETFs) gain approval in the United States and Hong Kong, indicating a growing acceptance of crypto exposure in traditional investment vehicles worldwide. Unlike spot BTC ETFs that are solely focused on cryptocurrencies, UCITS investments are divided into various fund types with different asset allocations based on risk profiles. If approved, there would not be an independent UCITS fund with a 100% crypto allocation, but rather multiple UCITS funds with a percentage allocation in crypto. Currently, EU regulations prohibit independent investment products centered around cryptocurrencies, so investors have to access them through exchange-traded notes. The European Union has a reputation for its strict crypto regulatory policy and was one of the first regions to introduce a comprehensive crypto regulatory framework through the Markets in Crypto-Assets Regulation (MiCA). One of the questions posed by the ESMA in the feedback is how the inclusion of specific cryptocurrencies in the framework would be affected by MiCA.