European DLT Pilot Regime under review – Recent developments in the EU

The regulatory conversation around the use of distributed ledger technology (DLT) in EU capital markets has entered a new phase. Following initial signals of concern in 2024, early 2025 has seen a more structured and coordinated push by both national and European institutions to reassess Regulation (EU) 2022/858 of 30 May 2022 on a pilot regime for market infrastructures based on distributed ledger technology (the DLT Pilot Regime or DLTR) and its role in the capital markets framework.

Background: 2024 – Institutional concerns emerge

In April 2024, the European Securities and Markets Authority (ESMA) issued a letter to the European Commission, highlighting several shortcomings of the DLTR, particularly its limited adoption and perceived operational constraints (including concerns around cash settlement and interoperability, uncertainties around custody of self-hosted wallets, and regulatory concerns such as consistency with the MiFID II framework). The Commission’s response in May 2024 expressed openness to future adjustments to mitigate these issues, while emphasising the need for further evidence and feedback from the market.

These exchanges set the stage for a more substantive policy conversation – one that has now accelerated in 2025.

Recent momentum: 2025 – Regulatory and policy reassessment

2025 has seen a marked increase in activity around the DLTR:

• On 9 April 2025, the AMF (Autorité des marchés financiers) and Consob (Commissione Nazionale per le Società e la Borsa), the national competent authorities for financial markets in France and Italy, jointly published a position paper proposing a number of improvements to enhance the DLTR's competitiveness. One notable proposal is to give ESMA a more active role in the assessment and approval process of DLT market infrastructures, including greater involvement in applying proportionality and adjusting regime thresholds, to promote regulatory convergence across the EU. The AMF and Consob’s call for an expanded and more flexible framework adds weight to ESMA’s earlier concerns.
  
  
• On the French side, both the AMF and the ACPR (Autorité de contrôle prudentiel et de résolution) had already put in place dedicated resources, such as staff, recommendations and guidelines pertaining to the DLTR. Based on publicly available information, the AMF is also currently assessing Lise (formerly Kriptown)’s application as SNR DLT (Système de Négociation et de Règlement basé sur la Technologie de Registre Distribué), which hopes to offer an innovative experience to their clients (issuers, investors, depositories and custodian account holders) by creating an exchange for SMEs combining negotiation and settlement in a single infrastructure.
• On the Italian side, competent authorities have been active in exploring and assessing the interaction between DLT infrastructures and financial or payment transactions. They've published a number of discussion papers and legal studies, and have also proposed technical solutions for cash settlement of DLT based transactions. Italy has already hosted an OTC transaction of tokenized bonds issued by Cassa Depositi e Prestiti under the domestic regime regulating the issuance and OTC trading of tokenized securities (Fintech Decree), proving to be a pioneer in this area.
  
  
• On 15 April 2025, the European Commission launched a Targeted Consultation on the Integration of EU Capital Markets, which explicitly includes a section “4.4. Innovation – DLT Pilot Regime and asset tokenisation.” Responses by market participants can be submitted until 10 June 2025. This marks a significant step: the Commission is now considering whether adjustments to the DLTR – or even more fundamental reforms – should form part of its broader effort of rolling out the savings and investments union (SIU) strategy. The consultation seeks detailed stakeholder feedback on key aspects such as increasing value limits, expanding eligible asset classes, broadening system coverage, and embedding DLT trading and settlement in existing regulatory frameworks. The consultation also explores improving regulatory flexibility, enhancing interoperability, addressing settlement asset risks, and clarifying governance and prudential standards. These questions clearly reflect and build upon earlier concerns raised by ESMA, AMF, and Consob – particularly regarding operational constraints, the scope and thresholds of assets, regulatory clarity, risk mitigation, and the need for greater flexibility and market adoption.

These recent initiatives suggest that the Commission is preparing to evaluate the future direction of the DLTR, including potential expansions, interoperability measures, and integration with asset tokenisation efforts.

Next steps

These discussions signal that the DLT Pilot Regime may be entering a reform phase, with both supervisory and legislative changes on the horizon. We’re closely monitoring these developments and their potential implications for market infrastructure providers, financial institutions, and tokenisation platforms.

We continue to monitor these developments closely and are available to assist clients in navigating the evolving regulatory landscape around DLT, asset tokenisation, and capital markets innovation. Please do not hesitate to get in touch with your usual DLA Piper contact to discuss what these developments may mean for your organisation.