On 20 February 2026, the EU Council launched technical-level discussions on proposed amendments to the Digital Ledger Technology (DLT) Pilot Regime, aiming to make the framework more attractive and scalable. A Presidency discussion paper circulated for a Working Party meeting structures the first examination of the European Commission's proposals, which include expanding eligible entities to crypto-asset service providers (CASPs), raising market value thresholds, and removing the six-year sunset clause. The talks are expected to reveal significant divergences among member states, particularly on the inclusion of CASPs and the long-term design of the regime.
Commission Proposes Major Overhaul
The Commission's proposal, part of the broader Market Integration and Supervision Package (MISP), seeks to broaden the scope and scale of the DLT Pilot Regime. Key changes include allowing Organised Trading Facilities (OTFs) and CASPs to participate, removing restrictions on eligible financial instruments, and raising aggregate market value thresholds to up to €100 billion under the regular regime. A new "simplified regime" with lower thresholds is also proposed for proportionality. The automatic six-year expiry of permissions would be replaced by an ESMA review and a Commission decision by 2030 on permanence. Additionally, a mechanism for ad-hoc exemptions from specific MiFID II, MiFIR, or CSDR rules would be introduced, along with clearer transition rules between regimes.
Member States Split on Key Issues
The Presidency paper identifies key areas of divergence among member states. While there is general support for expanding the regime, positions are split on including CASPs due to concerns over supervisory complexity. The use of aggregate market value as the sole metric for thresholds and transitions is also contested. Questions have been raised about the scope of the Commission's proposed delegated act power to adjust thresholds, with calls for a more precise definition of "market developments." On the strategic direction, some member states fear that removing the time limit while retaining the "pilot" label creates uncertainty, while others stress the need to maintain an experimental character given rapid technological evolution.
Impact on Stakeholders
The proposed changes would have significant implications for several stakeholders. For crypto-asset service providers, inclusion in the regime offers a pathway to operate within a regulated EU framework, potentially boosting innovation and market access. However, they would face new compliance costs and supervisory oversight. EU financial regulators, including ESMA and national competent authorities, would see an expanded supervisory burden, particularly if CASPs are included, requiring new expertise and resources. Traditional market infrastructures, such as trading venues and central securities depositories, may face increased competition from DLT-based alternatives but could also benefit from new business opportunities. EU investors would gain access to a broader range of tokenised assets under a regulated regime, enhancing market liquidity and choice, though risks related to market volatility and operational complexity remain.
Next Steps
The Presidency's questions will channel member state debates, with subsequent written procedures formalising positions. The outcome will determine the Council's ambition in balancing innovation facilitation with financial stability and investor protection. The Council's negotiating mandate will then be used in trilogue negotiations with the European Parliament, which is expected to adopt its position later this year.