When the European Commission unveiled its Market Integration and Supervision Package (MISP) in December 2025, it included plans to upgrade the DLT Pilot Regime, particularly raising the volume caps more than 16 fold. One of the most innovative proposals was a new distributed ledger-based securities settlement scheme. Multiple banks can settle DLT transactions without a single entity in charge, removing the need for a central securities depository (CSD).
The Association for Financial Markets in Europe (AFME) welcomes the idea, but notes that it suffers from the same low volume caps that prevented large organizations from participating in the DLT Pilot Regime. Alongside other proposals, AFME suggests raising the limits from €10 billion to €50 billion. Perhaps more importantly the European Commission should be able to adjust the limits via a delegated act when they see fit.
“A EUR 10 billion cap is prohibitively restrictive and uncompetitive, especially as other jurisdictions move to tokenise assets at scale. Without change, the revised regime risks repeating the shortcomings of the current pilot – remaining a niche sandbox rather than becoming a launchpad for next-generation capital markets infrastructure,” said Coen ter Wal, Managing Director and Head of Technology and Operations at AFME.
As context, the rationale behind the settlement scheme idea is simple. Without blockchains, central securities depositories (CSD) are a necessity. When a bank settles a transaction, the process is opaque meaning settlement finality is not obvious to other market participants. A CSD solves this. But if you introduce a transparent distributed ledger, then other parties can see when a transaction finalizes, and a distributed alternative to a CSD becomes viable.
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