On June 22, the European Central Bank (ECB) opinion on a proposal for regulation on a pilot regime for market infrastructures based on distributed ledger technology (DLT) was published in the Official Journal of the European Union.
First released in April, the EBC opinion raised diverse points for further consideration and drew attention to these three aspects :
1 - Effects on monetary policy of
Applying of DLT in existing settlement ecosystem
A potential fragmentation in collateral and liquidity pools and eventual increase in commercial bank money
2 - Oversight and systemic/financial stability
Role of the ESCB in the area of securities settlement
Participation of natural persons in DLT market infrastructure
Settlement of payments in DLT market infrastructures
Settlement of payments in central bank money
Settlement of payments with persons that are not licensed as credit institutions
Risk management requirements applicable to banking-type ancillary services
Insolvency protections under the Settlement Finality Directive
Level playing field between operators of DLT market infrastructures
Exit strategy for operators of DLT market infrastructures and removal of DLT transferable securities from trading
Interplay with the proposed Markets in Crypto-assets regulation
3 - Prudential supervision
ECB powers concerning activities of credit institutions
Authorisation and exemption process of credit and non-credit institution operators alike
The proposal is part of the digital finance package aiming to support and enable the potential of digital finance. Read Ameis' summary in the Regfacts/Industry News & Trends.