Axiology Submitted Proposals to the European Commission on Strengthening the DLT Pilot Regime
- Julija Mačiulskė
- Jun 17
- 2 min read
Updated: Jun 19
The proposals focus on enabling risk-free settlement, enhancing regulatory clarity, and equipping supervisors with digital-native tools to oversee next-generation market infrastructure.
Axiology has responded to the European Commission’s targeted consultation on capital markets integration, sharing five recommendations to future-proof the EU’s regulatory approach and accelerate innovation under the DLT Pilot Regime. We believe, that in order to improve the regulation, the following proposals should be implemented:
DLT market infrastructures should be permitted to use the most efficient settlement asset, specifically, central bank money, as envisaged in the regulation. The ability to settle in central bank money can mitigate dependence on commercial banks, who often simultaneously act as competitors. It can also support increased resilience, competition, and innovation.
E-money tokens, as well as the services associated with their use for payment or settlement, should be excluded from the scope of MiCA. Market practice has already shown evidence of inappropriate regulation. EMTs are subject to double regulatory requirements. This creates obstacles for market participants and unclarity of how to treat them.
The central securities depositories (CSDs) market should be competive in order to foster innovation, but regulation should facilitate cross border activity and interaction.
DLT Pilot regulation at the moment is temporal in nature (i.e. permission is granted for six years). EU legislators should bring more clarity to the market participants if this permission will be extended). The Regulation also should be improved by expanding the scope of financial instruments that may be admitted or recorded. Besides, the thresholds for those instruments shall be increased as it is one of the major drawbacks of the DLT Regulation. The regulation imposes restrictions on both the types of assets that may be admitted and their total value. Additionally, the market requires clarity on the future extension of the regime.
Supervision of market participants could be more efficient by leveraging new technologies, such as DLT. Non-significant market participants should be supervised by national competent authorities while significant ones could be supervised by on of ESA. The regulation should specify thresholds under which a market participant is considered significant. In general, the principle of proportionality should be reflected more in the EU regulatory framework.
These proposals reflect Axiology’s commitment to building resilient, inclusive, and future-ready innovative capital markets. By aligning regulation with the capabilities of distributed ledger technology, the EU can unlock deeper market integration and maintain its leadership in financial innovation.
Read the full proposal here:
About Axiology:
Axiology is a provider of capital market infrastructure, specialising in optimising and developing securities infrastructure based on distributed ledger technology (DLT). The company focuses on fixed-income instruments and developing trading and settlement systems powered by DLT. Its innovative solutions bridge traditional and tokenised financial infrastructures, enabling seamless integration into the evolving digital economy.
