The EU has published in the Official Journal of the European Union its Regulation on a pilot regime for market infrastructures based on distributed ledger technology. The pilot regime will permit certain DLT market infrastructures to operate with exemptions from some EU financial services legislation, which may otherwise inhibit the trading and settlement of crypto-assets. The regime is intended to promote legal certainty, support innovation, preserve market integrity and ensure financial stability for the use of DLT in crypto-asset and e-money token markets.
The regime is targeted at DLT multilateral trading facilities (DLT MTFs), DLT settlement systems (DLT SSs) and DLT trading and settlement systems (DLT TSSs). Key aspects of the regime include:
Permissions will be granted by national regulators to DLT market infrastructures to operate within the pilot regime for a period of up to six years from the date the permission is granted. ESMA will be entitled to issue non-binding opinions on requested exemptions, to which national regulators must give due consideration and notify ESMA if they make any significant deviations from ESMA's opinion. The Regulation will come into force on June 22, 2022 and will for the most part apply from March 23, 2023.
The pilot regime is part of the European Commission's 2020 EU Digital Finance Strategy, which also proposed regulations on markets in crypto-assets and digital operational resilience. The final versions of these pieces of legislation are yet to be published.
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