On Friday the Council of the EU agreed the main elements of its negotiating position on the market integration and supervision package (MISP), aimed at integrating European capital markets. The European Commission had proposed raising the limit for the DLT Pilot Regime that supports tokenization from the current €6 billion to €100 billion per DLT market infrastructure. EU finance ministers want to go further, lifting it to €300 billion with the possibility of a future increase to €500 billion via a Commission delegated act. Turning from tokenization to crypto and MiCA, the Council only wants significant crypto asset service providers (CASPs) supervised by ESMA at the EU level, with other CASPs still overseen by national authorities. The criteria for a significant CASP are outlined below.
Nasdaq, Boerse Stuttgart and many others had lobbied for the DLT Pilot caps to be dropped entirely. Notably, European Central Bank (ECB) President Lagarde objected to the higher €300 billion figure and urged Parliament to revisit it, warning that DLT structures risk not being interoperable and could reintroduce fragmentation. This may be a nod to the access and linkage rules in the Central Securities Depositories Regulation (CSDR), from which DLT Pilot Regime infrastructures are allowed some exemptions.
A related MISP plan would allow DLT-based settlement schemes run by groups of banks, functioning like a decentralized CSD. The Commission had proposed a cap of €10 billion for these schemes, which the Council chose to raise to €50 billion, the minimum suggested by industry group AFME.
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