Lithuania’s Axiology has been granted a DLT Pilot Regime license allowing it to operate a combined trading and settlement system (DLT TSS). The regime supports exemptions from certain mainstream capital markets laws, including the conventional separation of trading and settlement. The same firm will also provide custody when it launches in the autumn of this year.
The company is targeting the issuance, trading and settlement of digital bonds, claiming it can achieve a 40% reduction in costs. Germany’s Cashlink previously estimated DLT savings of up to 85%, although that related only to middle and back office costs. This opens up the market to SME issuers, while Axiology also hopes to work with Lithuania’s Ministry of Finance on government bonds. In that case, the goal is to issue small denominations to retail investors.
Retail access is one of two major differences between Axiology and 21X, the recipient of the first DLT TSS license. Unlike 21X, Axiology did not request exemptions to allow it to engage directly with retail participants. Nor is it using a permissionless blockchain. Instead, it is based on a permissioned version of the XRP Ledger (XRPL). The company plans to reach retail investors via crowdfunding platforms, neo-brokers, broker-dealers and other partnerships.
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