The EU DLT Pilot Regime for Digital Assets [pre-publication]

Abstract

On 23 March 2023, the DLT-Pilot-Regime came into force. It provides market operators the opportunity to offer blockchain-/DLT-based securities trading subject to full EU financial markets regulation. Although this piece of legislation has not attracted as much attention as the Regulation on markets in crypto-assets (MiCAR), the impact of the DLT-Pilot might be signification. In this article, we outline how the EU legislators have identified the shortcomings of current EU market regulation when applied to DLT-based trading, and addressed them one by one. If successful, the DLT-Pilot could become a ‘test kitchen’ for the development of DLT-based securities and crypto-asset trading in the EU. distributed ledger technology, DLT Pilot, financial instrument, MiCAR, regulatory sandbox, settlement system, multilateral trading facility