- 21Shares pushes for a unified European framework to include crypto in investment products.
- Inconsistent regulations across Europe create confusion for retail and institutional investors.
- A common regulatory stance could position Europe at the forefront of financial innovation.
21Shares, a leading crypto exchange-traded product (ETP) issuer, urges European Union regulators to adopt a unified regulatory framework for integrating digital assets into investment products. According to a recent press release, the firm called on the European Securities and Markets Authority (ESMA) to streamline the rules across all EU member states.
The current fragmented approach leaves retail and institutional investors facing inconsistent guidelines when investing in crypto through UCITS (Undertakings for Collective Investment in Transferable Securities) funds.
Countries like Germany and Malta permit UCITS to hold digital assets, while others, including Luxembourg and Ireland, do not. These discrepancies confuse investors and often force them to pursue less-regulated alternatives, potentially exposing them to higher costs and risks.
Inconsistent Crypto Rules Impacting UCITS Funds
21Shares argues that the absence of a harmonized approach across Europe hinders investor protection. To address these challenges, the company is advocating for a consistent regulatory framework that covers indirect digital-asset exposure for UCITS funds across the EU.
A unified stance would simplify investor decision-making, making it easier for both retail and institutional investors to navigate their options in a transparent, regulated environment.
21Shares’ Head of Financial Product Development, Mandy Chiu, highlighted that the inconsistent regulatory landscape is preventing many investors from tapping into the potential of digital assets. By setting clear and uniform guidelines, ESMA could unlock new opportunities for portfolio diversification across Europe.
Global Competitiveness in the Crypto Market
A standardized regulatory framework would align Europe with other major markets, such as the US and Hong Kong, which have already introduced crypto exchange-traded funds (ETFs). This would protect investors and encourage further innovation in the European crypto space.
As the crypto market continues to mature, offering higher levels of transparency and security, 21Shares stresses the need for swift regulatory action. A unified approach would keep Europe competitive, prevent capital outflows, and provide investors with more secure, cost-effective avenues to access digital assets.
Nevertheless, with a coordinated framework in place, Europe could become a leader in financial innovation while ensuring greater investor protection and market stability in the evolving crypto landscape.
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