Financial leaders in Europe are pressing for swift changes to the rules governing distributed ledger technology, cautioning that the region is in danger of lagging behind the US in the digital finance sector. In a joint letter, 39 key signatories, including major financial groups and fintech associations, have appealed to the European Commission and Parliament to isolate the DLT pilot regime from a broader package of 18 financial laws currently under review.
By handling the DLT rules independently, the firms argue that updates can be implemented more rapidly. The DLT pilot, which has been in place since 2023, enables companies to experiment with the trading and settlement of tokenized assets, such as shares and bonds, using blockchain technology. However, the pilot is currently part of a larger legislative package that is navigating the EU's legislative process, a journey that industry groups warn could take years to complete. The coalition is advocating for practical reforms, including the expansion of permissible assets, the increase of transaction limits to 150 billion euros, and the elimination of license expiry dates.
These changes, they contend, would provide firms with the necessary flexibility to establish full-fledged markets rather than limited trials. The appeal comes as the US is shaping its own laws to regulate the space, including the proposed Genius Act, aimed at integrating crypto into mainstream finance. The European Commission has indicated a preference for passing the entire legislative package as a cohesive unit, as part of its overarching plan to mobilize savings into investment.