21Shares, a major provider of crypto exchange-traded products (ETPs), has asked regulators in the European Union to make clear and uniform rules about how cryptocurrency can be used in financial products such as UCITS funds. The company says that buyers are confused by the fact that regulations in Europe are not all the same.
On October 7, 21Shares made a public request to the European Securities and Markets Authority (ESMA) for crypto assets to be officially recognized within the UCITS system. ETPs and exchange-traded funds (ETFs), which are investment funds for individual buyers, are included in this scheme.
At the moment, EU countries have very different rules. Countries like Luxembourg and Ireland do not allow UCITS funds to hold crypto assets, but Germany and Malta do. 21Shares says that this lack of stability makes investment choices harder for both individual and business investors because it causes doubt.
The business wants a unified method that would make the rules clearer and protect investors better, like in the U.S. and Hong Kong. A standardized system would let buyers all over Europe get into crypto through safe, low-cost investment companies.
Mandy Chiu, who is in charge of developing financial products at 21Shares, is worried about the current state of laws. She called them a “patchwork” that makes it hard for regular buyers to fully benefit from digital assets. She stressed that a unified set of rules from ESMA could open up new financial possibilities and let people diversify their portfolios in a safe, regulated setting.
21Shares also wants to see clearer rules on how to use ETPs to indirectly access crypto assets. By treating investing in crypto This would give buyers an extra layer of protection, just like regular stocks do.
ESMA started a consultation in May to look into whether crypto and other financial assets could be used under the UCITS scheme. It is now looking at what the industry has to say. The framework that comes out of this should make things clearer for investors and make the rules across Europe more consistent.
With more than 40 ETPs traded on 11 exchanges, 21Shares keeps pushing the limits of how digital trades can be made. This company runs a spot Bitcoin ETF in the United States with ARK Invest. The fund has over $2.6 billion in assets, making it one of the biggest of its kind in the world. 21Shares wants to make it easier for regular people in Europe to invest in crypto assets by pushing for better rules.
