The European Union security watchdog, the European Securities and Markets Authority (ESMA), is seeking the opinion of experts on whether to add crypto to the 12 trillion euro ($12.8 trillion) investment product market.

The ESMA asked industry experts for their views on whether Undertakings for Collective Investment in Transferable Securities (UCITS) — an investment product market valued at 12 trillion euros — can gain exposure to different asset classes such as structured or leveraged loans, catastrophe bonds, emission allowances, commodities, crypto assets and unlisted equities.

UCITS are a class of investment funds comprising products intended to protect and simplify investing transactions. UCITS are often comprised of mutual, exchange-traded or money market funds. EU regulations govern these funds; however, non-EU investors can also gain exposure.

UCITS stakeholders have until Aug. 7 to submit their comments. If approved, UCITS would become one of the largest mainstream funds with crypto exposure.

The request for expert opinions comes amid the approval of spot Bitcoin (BTC) exchange-traded funds in the United States and Hong Kong, with securities regulators worldwide appearing to warm up to crypto exposure in traditional investment vehicles.

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While spot BTC ETFs are solely crypto-focused, UCITS investments are divided into numerous fund types, each with a particular asset allocation based on the fund’s risk profile.

If approved, there won’t be an independent UCITS fund with 100% crypto allocation but multiple UCITS funds with a percentage allocation in crypto.

EU regulations currently prohibit independent crypto-centered investment products. Thus, investors have to access them via exchange-traded notes.

The European Union is known for its strict crypto regulatory policy. It is one of the first regions to introduce a complete crypto regulatory framework in the form of its Markets in Crypto-Assets Regulation (MiCA).

One of the questions asked by the ESMA in the feedback is how adding specific cryptocurrencies to the framework would or wouldn’t be affected by MiCA.

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