Key Points
- The EU’s securities watchdog is debating with stakeholders whether to include crypto in investment products.
- The mutual fund framework UCITS is currently worth about 12 trillion Euros.
According to the latest reports, a potential decision coming from the European Union securities watchdog could have a massive impact on the crypto industry.
The European Securities and Markets Authority (ESMA) has just asked stakeholders whether it should add crypto into investment products. This could enable digital assets to flow into a market that’s bigger than Bitcoin ETFs in the US.
EU’s watchdog asked industry and experts to offer input into expanding the assets eligible for the network called UCITS – Undertakings for Collective Investment in Transferable Securities.
Gathering info and assessing risks
In the original press release, ESMA shared a Call for Evidence on the review of UCITS Eligible Assets Directive (EAD).
ESMA notes that investors and consumer groups who are interested in retail investment products, management companies of UCITS, self-managed UCITS investment companies, depositaries of UCITS, and trade associations are invited to provide their feedback on market practices.
Also, they are invited to provide interpretation or practical application issues regarding the eligibility criteria and other provisions set out in the UCITS EAD.
Also, ESMA is interested in tethering insights on some important notions and definitions used in the UCITS EAD and their transversal consistency with other pieces of legislation in the EU Single Rulebook, according to the same press release.
ESMA notes that UCITS are the key retail investment product in the EU, and it accounts for about 75% of all collective investments by retail investors. They also revealed that the huge success of the entity as a global brand is based on its established reputation of being well-regulated and supervised investment products.
The note concludes by saying that ESMA will consider all feedback received by August 7, 2024, using the form available on the related webpage.
ESMA will reportedly take into account the evidence and views that will be collected and accordingly, it will develop its technical advice to the European Commission.
UCITS market surpasses US’ Bitcoin ETFs
Such a move could open the door to broader access to crypto via UCITS – a 12 trillion euro market that surpasses the one of Bitcoin ETFs in the US.
BlackRock’s spot Bitcoin ETF, IBIT, has brought in almost $20 billion in assets since it launched on January 11, notes Eric Balchunas on his X account.
It is now 88th among all spot ETFs, according to Balchunas, an analyst at Bloomberg Intelligence focused on exchange-traded funds.
$IBIT is nearing $20b in assets, curr 88th spot among all ETFs, which puts it in Top 3%. It just passed a bunch of veterans incl $EEM, $EWJ, $SMH and $TIP pic.twitter.com/IgmuHpFlKb
— Eric Balchunas (@EricBalchunas) April 8, 2024
According to CoinShares, Bitcoin ETFs saw $643 million in inflows last week.
