Scaling DLT-based Capital Markets - A Policy Roadmap for the EU

The last years have seen significant acceleration in the development of DLT-based capital markets, with an uptake in DLT-based bond issuances, increasing evidence of demonstrated liquidity, and benefits throughout the security lifecycle. International and European SSA and government bond issuers have led this charge, and the market ecosystem is growing with an increasing number of investors, issuers, and other market participants adopting DLT.
In this context, AFME encourages European SSA issuers to seize the opportunities of leading and shaping the capital market transformation towards DLT. In parallel, policymakers play an equally important role in ensuring that the regulatory framework fully supports the deployment of DLT in the financial sector by addressing outstanding blockers across the security lifecycle and providing digital cash solutions.
This Policy Roadmap sets out an 8-point plan focusing on specific policy and regulatory changes that are necessary to enable that development and growth of DLT-based capital markets, with a focus on 1) updating the sandbox regimes in line with market momentum and 2) introducing a definitive permanent framework for DLT-based securities to maximise their economic functions, attractiveness to investors and technological benefit.
The Policy Roadmap is to be read jointly with AFME’s separate recommendations for issuers (‘Issuer Roadmap’), which was published in June 2024.