24 March 2022
With an overwhelming majority, MEPs today backed a pilot regime for market infrastructures based on distributed ledger technology (DLT). According to ECR Rapporteur Johan van Overtveldt, “the creation of a testing ground for the use of DLT in the field of financial services is an important milestone for keeping up with financial innovations taking place on a global scale.”
As part of the Commission’s Digital Finance package, the DLT pilot regime aims to make financial services regulation fit for the digital age. It does so by granting temporary conditional exemptions from current legislation to enable the use of DLT and provide trading and/or settlement services for crypto-assets that qualify as financial instruments. The experience gained with the regime should help market participants and regulators identify proposals for suitable future rules on the trading and settlement of transactions in traditional financial instruments such as bonds, shares, and exchange-traded funds that are “tokenised”.
“We managed to put together a proposal that embraces innovation while securing appropriate safeguards for investor protection, financial stability, and a level playing field, among other measures”, Mr Van Overtveldt said.
“The DLT pilot regime fully fits the objectives of the Capital Markets Union, helps us to keep on track in an evolving digital world, and puts the EU at the forefront of innovation”, he added.
The report was adopted with 527 votes in favour, 28 against and 31 abstentions.