Introduction
The French financial regulatory authority, Autorité des Marchés Financiers (AMF), along with its Italian counterpart, Commissione Nazionale per le Società e la Borsa (CONSOB), has taken significant steps in advocating for enhancements to the regulatory environment surrounding blockchain and distributed ledger technology (DLT) within European financial markets.
Regulatory Recommendations
On Wednesday, the regulators submitted a set of recommendations to the European Commission aimed at creating a more accommodating and efficient regulatory framework. This framework is designed to facilitate the integration of DLT into established market structures and foster a broader culture of experimentation within the sector.
Background and Need for Change
The push for change follows disappointing outcomes from the EU’s Pilot Regime launched in March 2023, which was intended to create a legal framework for testing blockchain applications related to trading, settlement, and custody of financial instruments. However, interest and participation fell short of expectations, highlighting a need for reassessment.
“Given Europe’s ambition to enhance its financial markets in support of the Savings and Investment Union, it is crucial that a competitive regulatory environment is established to promote innovation and trial initiatives using DLT,” stated Marie-Anne Barbat-Layani, Chair of AMF.
Key Recommendations
The recommendations from AMF and CONSOB emphasized three critical improvements:
- Flexible and Proportional Framework: They advocated for a regulatory framework tailored to the size and nature of various DLT projects, aimed at lowering barriers for firms interested in trialing DLT technologies.
- Expansion of the Pilot Regime: The regulators suggested expanding the Pilot Regime to accommodate larger projects by increasing eligibility standards and capital thresholds and including a wider spectrum of financial products.
- Improved Interoperability: They noted the need for improved interoperability between DLT systems and traditional financial infrastructures, arguing for common standards at the European level to simplify engagement processes.
Comparative Progress in Switzerland
In contrast to this regulatory initiative, progress on DLT is already underway in Switzerland. For instance, the Boerse Stuttgart Group recently introduced the first market for trading digital securities via blockchain as of March 2025. Their subsidiary, BX Digital, has received authorization from FINMA to operate a trading system that supports the secondary market exchange of tokenized assets.
Future Implications
The upcoming deliberations by the European Commission concerning the AMF and CONSOB’s proposals could significantly shape the future of blockchain and DLT adoption within the EU. Potential revisions might offer a streamlined mechanism for future DLT experimentation and integration within Europe’s financial landscape.
