Archive|Deep Briefs|
|
← Back to Glossary

DLT Pilot Regime

RegulationUpdated: January 15, 2025
Also known as: EU DLT Pilot Regime, DLT Pilot

Browse all Regulation terms

AI RMF (AI Risk Management Framework)Asset SegregationBeneficial OwnershipBeneficiaryBIS (Bank for International Settlements)BSA (Bank Secrecy Act)CASP (Crypto-Asset Service Provider)CASP LicenseCFTC (Commodity Futures Trading Commission)Client AssetsData MinimizationeIDAS 2.0ESMA (European Securities and Markets Authority)FATF (Financial Action Task Force)FCA (Financial Conduct Authority)FEAT PrinciplesFinCEN (Financial Crimes Enforcement Network)FINMA (Swiss Financial Market Supervisory Authority)FINRA (Financial Industry Regulatory Authority)FSB (Financial Stability Board)GDPR (General Data Protection Regulation)High-Risk AI SystemHowey TestKYC (Know Your Customer)Market ManipulationMAS (Monetary Authority of Singapore)MiCA (Markets in Crypto-Assets Regulation)MiCA ComplianceMiFID IIOFAC (Office of Foreign Assets Control)OriginatorPassportingPEP (Politically Exposed Person)PII (Personally Identifiable Information)Qualified CustodianQualified InvestorRetail InvestorRight to be ForgottenSAR (Suspicious Activity Report)SEC (Securities and Exchange Commission)SOC 2 (Service Organization Control 2)Strict LiabilityTransaction MonitoringVARA (Virtual Assets Regulatory Authority)Virtual AssetVirtual Asset Service Provider (VASP)Wash Trading
EU regulatory sandbox allowing distributed ledger technology testing for securities trading and settlement

The EU DLT Pilot Regime is a regulatory sandbox framework established under Regulation (EU) 2022/858 that allows market infrastructures to test distributed ledger technology for trading and settlement of financial instruments while temporarily exempting participants from certain requirements under existing EU securities legislation.

The regime enables multilateral trading facilities, securities settlement systems, and central securities depositories to operate DLT-based infrastructures for crypto assets qualifying as financial instruments, addressing regulatory barriers that prevent full DLT implementation in traditional securities markets. Participants must obtain authorization from national competent authorities under ESMA oversight, comply with strict operational, governance, and investor protection requirements, and provide regular reporting on their operations.

The pilot regime runs until March 2026, with possible extension, allowing maximum transaction volumes and market capitalization thresholds to test tokenized securities trading, instant settlement, and smart contract automation while maintaining regulatory safeguards for market integrity and investor protection.

Related Terms

Tokenized SecuritiesBlockchainSmart Contract
← Back to Full Glossary