- EU finance ministers agreed to raise the DLT Pilot Regime cap to €300 billion ($324 billion), far exceeding the European Commission’s €100 billion ($108 billion) proposal, with a possible future increase to €500 billion ($540 billion).
- Only significant crypto asset service providers (CASPs) will face EU-level supervision by ESMA, while smaller CASPs remain under national oversight.
- ECB President Christine Lagarde objected to the higher cap, warning that DLT structures risk fragmentation and a lack of interoperability.
- The Council also raised the cap for DLT-based bank settlement schemes from the Commission’s proposed €10 billion ($10.8 billion) to €50 billion ($54 billion).
On Friday the Council of the EU agreed on the main elements of its negotiating position for the market integration and supervision package (MISP), aiming to integrate European capital markets. The European Commission had proposed raising the DLT Pilot Regime limit from €6 billion ($6.5 billion) to €100 billion ($108 billion), but EU finance ministers pushed it higher to €300 billion ($324 billion), with a potential future increase to €500 billion ($540 billion) via a Commission delegated act.
Consequently, the Council decided that only significant crypto asset service providers (CASPs) will face supervision by the European Securities and Markets Authority (ESMA) at the EU level. Other CASPs will remain under the oversight of national authorities, with specific criteria defining significance. Nasdaq, Boerse Stuttgart, and many others had lobbied for the DLT Pilot caps to be removed entirely.
However, European Central Bank (ECB) President Christine Lagarde objected to the €300 billion figure and urged Parliament to revisit it. She warned that DLT structures risk not being interoperable and could reintroduce fragmentation, possibly referencing the access and linkage rules in the Central Securities Depositories Regulation (CSDR), from which DLT Pilot infrastructures receive some exemptions.
Meanwhile, a related MISP plan allows DLT-based settlement schemes run by groups of banks, functioning like a decentralized CSD. The Commission had proposed a cap of €10 billion ($10.8 billion) for these schemes, but the Council raised it to €50 billion ($54 billion), the minimum suggested by industry group AFME.
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