Today the Association for Financial Markets in Europe (AFME) published its vision for future DLT-based architecture for European capital markets, including the UK. It comes amid rapid growth in DLT-based financial markets with showing global DLT fixed income issuance reached €4.8bn in 2025, tokenized US Treasuries hit $9bn (up 130%), and DLT repo volumes surged to $384bn per day. The paper follows the release last month of the European Central Bank’s (ECB’s) roadmap for Project Appia, its longer term project for DLT and tokenization in the EU. While the two pieces of work substantially overlap, AFME’s paper is more specific, and also deviates from the ECB’s pathway in some important respects, which we’ll explore first.
While AFME supports a public-private role in developing digital money systems including central bank money and tokenized deposits, it pushed back on a public sector managed unified ledger approach for securities and assets, insisting that asset-based ledgers must be market run. However, it does see value in a singular cash ledger, unified across currencies and jurisdictions, that could hold central bank money, commercial bank money and institutional stablecoins to limit liquidity fragmentation. The Appia roadmap was noncommittal on this cash versus asset split, stating the central bank ledger might host central bank money only, or also securities and regulated private settlement assets including tokenized deposits.
The Project Appia roadmap barely addressed the topic of permissionless blockchains. AFME envisions that future capital markets are likely to be multi-chain, with primarily public permissioned distributed ledgers, especially layer 2 blockchains that are anchored to permissionless chains. Hence, it calls for regulators not to obstruct the use of permissionless chains, especially through the current prohibitive capital requirements for banks outlined by the Basel Committee.
One topic that could prove to be controversial is sovereignty, which is currently a major European driver. While acknowledging this, AFME argues that the network layer of DLT, like the internet, is global by definition and derives its functions and benefits from distribution. AFME only touched on this point, and it is likely the sovereignty issue will be a stronger requirement for digital currencies. For asset networks there may be a happy medium between requiring the DLT to be entirely EU controlled versus an entirely foreign controlled network. That’s especially because AFME is advocating for public permissioned ledgers. A key question is whether permissioned ledgers should have sufficient EU governance and validator presence, with the definition of sufficient up for debate.
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