The European Union's financial regulator, the European Securities and Markets Authority (ESMA), is considering including cryptocurrencies such as bitcoin (BTC) in the region's vast investment universe.
In this regard, the Authority has highlighted the potential for collective investment companies with transferable securities (UCITS) to diversify portfolios by including #cryptocurrencies among other asset classes.
In guidance published on May 7, ESMA launched a consultation with industry experts to gather views on the feasibility and potential impact of integrating cryptocurrencies into UCITS.
#CryptoWatchMay2024 is giving a hidden buy signal.
UCITS typically include mutual funds, exchange-traded funds and money market funds regulated by EU regulations. However, UCITS also attract non-EU investors seeking access to European markets.
ESMA said in a statement, "such as listed mutual funds (quota, commodities, crypto-assets and unlisted equities).
Stakeholders have until August 7 to give their opinions on what could make UCITS one of the largest mainstream funds with access to crypto assets.
While there are products such as bitcoin exchange-traded funds (ETFs) that offer direct access to #cryptocurrency investments, it's worth noting that UCITS is significantly different.
Instead of a separate fund dedicated to cryptocurrencies, UCITS investments utilize a diversified approach that may include multiple funds with varying shares of cryptocurrencies.
This strategy is therefore likely to comply with existing EU regulations, which prohibit the creation of fully independent investment funds dedicated to cryptocurrencies. Given that the introduction of ETFs in the U. S. has seen #CryptoWatchMay2024 reach an all-time high of over $73,000 in March 2024, one can only speculate what impact this product would have on the bitcoin price if it were to be enacted into law.
Indeed, the EU is committed to providing simplified regulation of cryptocurrencies.
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