EU’s Relaxed Securities Laws for Blockchain Technology Here to Stay, Assures Official

EU Official Ensures the Permanence of DLT Securities Rules

EU official confirms that DLT (distributed ledger technology) securities rules are permanent.

Brussels, Belgium. In a move that brings immense relief to the digital asset investment community, a European Union (EU) official confirmed that the relaxed securities laws aimed at promoting distributed ledger technology (DLT) are here to stay. The announcement is a welcome reassurance, as concerns that the project could be abandoned prematurely have hindered investment in blockchain initiatives.

The EU, along with many global jurisdictions, has been exploring the potential of blockchain technology, the backbone of the cryptocurrency world. Recent research suggests that leveraging blockchain could potentially save financial markets a staggering $100 billion annually by streamlining processes and freeing up collateral.

Since April, the EU has introduced new financial services rules that enable securities traders to directly interact with markets and allow exchanges to register tokens without relying on regulated intermediaries such as brokers and depositories. However, the perception of this regime being short-term has dampened the enthusiasm for investing in innovative blockchain ideas.

To address these concerns, Ivan Keller, an official at the European Commission, the entity responsible for proposing the rules, was quick to assert that the legislation is here to stay. Although a review is scheduled to take place after three to six years, Keller emphasized that the lighter rules will continue to apply by default. Therefore, discontinuing the DLT pilot is highly unlikely.

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Despite the extensive efforts to design the new regulatory framework, the response has been lackluster, with only two official applications received and a small number in the pipeline. Keller expressed his personal desire to see more applications and revealed that existing licensed multilateral trading facilities and innovative structures combining trading and settlement functions have submitted proposals. Notably, there is a preference for permissioned systems that maintain centralized control.

Across the English Channel, the United Kingdom intends to nurture innovation through its own DLT securities trials, with detailed secondary laws expected to be finalized by year-end, according to Sasha Mills, the executive director for financial market infrastructure at the Bank of England. Mills emphasized the importance of calibrating trading limits to mitigate any potential risks to the financial system, particularly for assets within the sandbox that have a more systemic impact.

Cecilia Skingsley, head of the innovation hub at the Bank for International Settlements, which brings together the world’s central banks, remarked that major securities issuers like governments have been cautious due to potential risks. However, Skingsley firmly believes that wider adoption of blockchain technology is just a matter of time. She stressed the need to demonstrate to legislators, media, and society at large that blockchain is not just another crypto hype, but a practical and useful solution for society in the long run.

So, dear investors, fear not! The EU’s commitment to blockchain and DLT is unwavering, and the potential for this technology to revolutionize financial markets is undeniable. It’s time to jump on the blockchain bandwagon and ride the wave of digital innovation that will shape tomorrow’s economy. Let’s embrace the future of finance together!

Original article edited by Parikshit Mishra.

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