Decentralized Finance and EU Law: The Regulation on a Pilot Regime for Market Infrastructures Based on Distributed Ledger Technology
-
-
[1] University of Milano-Bicocca
University of Milano-Bicocca
Milán, Italia
-
- Localización: European papers: a journal on law and integration, ISSN-e 2499-8249, Vol. 7, Nº. 2, 2022, págs. 601-613
- Idioma: inglés
- Enlaces
-
Resumen
The decentralized issuance of financial instruments is presently problematic under EU law. This situation will change with the entry into force of the Regulation on a pilot regime for market infrastructures based on distributed ledger technology. The Regulation provides for a regulatory sandbox – the pilot regime – that market operators can use to test distributed ledger technologies in the financial market industry in a way compatible with EU law. While this will improve legal certainty and increase protection for consumers, it will also introduce a completely new paradigm in financial market legislation: the decentralization of financial instruments. Moreover, the Regulation imposes considerable obligations on market operators, while also granting to the European Securities and Markets Authority and national competent authorities a relevant but difficult role in overseeing and monitoring the pilot regime’s development. This Insight aims to provide an overview of the novel features introduced by the Regulation and reflect on whether the legislation will favour or frustrate innovation at EU level.
