European Commission welcomes agreement on DLT regime for market infrastructures

The European Commission today welcomed the political agreement reached yesterday between the European Parliament and the Council on the Commission’s proposal for a Regulation on a pilot regime for market infrastructures based on distributed ledger technology (DLT). This is an important part of the Commission’s Digital Finance Strategy, which aims to make Europe’s financial services more digital-friendly and to stimulate responsible innovation and competition among financial service providers in the EU.

The pilot regime will allow EU regulators and market participants to gain experience using distributed ledger technology (i.e. the technology used for the trading and settlement of ‘tokenised’ financial instruments), while ensuring that they can deal with risks to investor protection, market integrity and financial stability. In doing so, the pilot regime will help develop secondary markets for financial instruments in a crypto-asset form and promote the uptake of this technology in the trading and post-trading area.

The Commission also welcomes the political agreement reached on the changes to the Central Securities Depositories Regulation that allow for a deferral of mandatory buy-ins. This will allow further time to determine the best way forward to improve settlement efficiency while avoiding potential negative consequences.

Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said:

“I warmly welcome the political agreement between the European Parliament and Council and would like to thank the negotiators for both the speed and effectiveness of their work on the DLT pilot regime proposal. This agreement is important as it allows Europe to move forward in supporting innovation while safeguarding investor protection, market integrity and financial stability.”

The Commission also welcomes the adoption yesterday by Member States in COREPER of a general approach on the two other legislative proposals that are part of the Digital Finance Strategy: the proposal for a Regulation on markets in crypto-assets (MiCA) and the proposal for a Regulation on digital operational resilience for the financial sector (DORA).