What happened?
The French Autorité des Marchés Financiers (AMF) and the Italian Commissione Nazionale per le Società e la Borsa (CONSOB) submitted recommendations to the European Commission to adjust blockchain and distributed ledger technology (DLT) regulations. These recommendations aim to create a more flexible regulatory framework to support DLT integration into existing financial markets. The need for these changes arose from the disappointing performance of the EU’s Pilot Regime, which failed to attract significant participation.
Who does this affect?
This affects financial institutions, regulatory bodies, investors, and companies interested in implementing blockchain technologies within the European Union. By proposing these regulatory adjustments, the AMF and CONSOB aim to lower barriers for firms wishing to experiment with DLT, affecting a broad range of market participants. It also impacts the European Securities and Markets Authority (ESMA), which would play a significant role in ensuring consistent application of these new rules across the EU.
Why does this matter?
This proposal matters because it could significantly influence the market by encouraging broader adoption and experimentation with blockchain technologies across Europe. By creating a more accommodating regulatory environment, larger scale projects, including those involving structured bonds and derivatives, might see increased participation, enhancing market competitiveness. Additionally, interoperability between DLT and traditional systems could streamline processes, attract more players, and drive innovation within the financial sector, potentially leading to transformative changes in how financial transactions are conducted.