Subtitle
The distributed ledger technology (DLT) opens new opportunities for financial markets, allowing transactions and asset accounting directly between participants without intermediaries. Many European companies are actively implementing DLT-based solutions, particularly for the issuance and circulation of tokenized financial instruments.
However, EU regulators are still very cautious about the use of DLT in financial markets. In 2022, a pilot regime was launched that introduces restrictions on the scale of tested solutions. According to market participants, these restrictions are too rigid and may push companies to transfer their projects to more favorable markets, such as the United States.
Industry Position
European tokenization companies, such as STOKR, ADDX, and Tokeny Solutions, are urging EU lawmakers to urgently amend the DLT pilot regime to expand its capabilities. They warn that the current limits on the volume of token issuance and the number of transaction participants create a risk that on-chain markets will be displaced to the United States, where regulation is more flexible.
According to experts, the EU needs to accelerate the adaptation of the regulatory framework to rapidly developing technologies in order to support innovation and prevent the outflow of markets outside Europe. A flexible and adaptive approach by regulators will allow companies to test new solutions without fear of excessive restrictions.
Conclusion
The current restrictions of the DLT pilot regime in the EU risk pushing the markets of tokenized assets to be relocated to the United States, where the regulation is more favorable for innovation. To avoid losing these promising markets, European regulators need to immediately adjust the regulatory framework, expanding the opportunities for testing new solutions based on distributed ledger technology.