I went looking for how many companies are actually licensed to run a blockchain securities venue in the EU. The answer was smaller than I expected.
The EU built a sandbox for exactly this. The DLT Pilot Regime came into force in March 2023, letting operators run tokenised trading and settlement with targeted exemptions from CSDR and MiFID II. Purpose built for this problem. Three years old now.
Six authorisations. That is the entire list.
The UK opened its Digital Securities Sandbox in September 2024, more than a year later, and had sixteen firms inside within sixteen months.
ESMA has been unusually blunt about why. Its own review found the thresholds too restrictive, flagged that operators cannot get proper access to central bank money for the cash leg, and admitted nobody knows whether the regime is temporary or permanent. Hard to build a business on a sandbox that might be switched off.
Earlier this year several of the licensed venues wrote to the Commission themselves, warning that Europe is being overtaken while it consults.
Here is why I think this matters for Dusk specifically. Look at how NPEX is authorised. AFM regulated, MTF, broker, ECSP. Those are ordinary MiFID and crowdfunding permissions, not pilot regime exemptions. Which means the volume caps strangling the sandbox do not obviously bite the same way.
If that reading is right, the strategy is less about waiting for Brussels to fix the sandbox and more about running regulated activity under licences that already work, with the chain doing settlement underneath.
I am not certain that is the intent though. @Dusk_Foundation is the plan to operate through existing MiFID authorisations rather than pilot regime permissions, and what happens to that approach if ESMA's recalibration lands and the sandbox suddenly becomes the better route?
Has anyone here concluded the pilot regime is worth entering at all right now?
@Dusk_Foundation $DUSK #dusk #RWA
The EU built a sandbox for exactly this. The DLT Pilot Regime came into force in March 2023, letting operators run tokenised trading and settlement with targeted exemptions from CSDR and MiFID II. Purpose built for this problem. Three years old now.
Six authorisations. That is the entire list.
The UK opened its Digital Securities Sandbox in September 2024, more than a year later, and had sixteen firms inside within sixteen months.
ESMA has been unusually blunt about why. Its own review found the thresholds too restrictive, flagged that operators cannot get proper access to central bank money for the cash leg, and admitted nobody knows whether the regime is temporary or permanent. Hard to build a business on a sandbox that might be switched off.
Earlier this year several of the licensed venues wrote to the Commission themselves, warning that Europe is being overtaken while it consults.
Here is why I think this matters for Dusk specifically. Look at how NPEX is authorised. AFM regulated, MTF, broker, ECSP. Those are ordinary MiFID and crowdfunding permissions, not pilot regime exemptions. Which means the volume caps strangling the sandbox do not obviously bite the same way.
If that reading is right, the strategy is less about waiting for Brussels to fix the sandbox and more about running regulated activity under licences that already work, with the chain doing settlement underneath.
I am not certain that is the intent though. @Dusk_Foundation is the plan to operate through existing MiFID authorisations rather than pilot regime permissions, and what happens to that approach if ESMA's recalibration lands and the sandbox suddenly becomes the better route?
Has anyone here concluded the pilot regime is worth entering at all right now?
@Dusk_Foundation $DUSK #dusk #RWA