Drum roll ladies and gentlemen, it finally happened! We finally saw a long awaited milestone in the European Blockchain regulatory scene and it just might become another kick start factor for the further development in the field. The European Securities and Markets Authority (ESMA) released a report called Distributed Ledger Technology Applied to Securities Markets build on the discussion paper released last year in June. The main European Union securities authority notes that Distributed Ledger Technology (DLT) also known as Blockchain technology could bring huge cost efficiency savings “notably, more efficient post-trade services, enhanced reporting and data management capabilities.”
More specifically, ESMA who provides supervision over Europe’s financial market and infrastructure foresees DLT as having a profound effect on CCPs and CSDs, but regulatory grey areas still remain grey. On one hand, there needs to be less on some regulatory regimes, but on the other, there needs to be new legislation to mitigate potential emerging risks when applying Blockchain technology to financial markets. The authority states that beyond financial regulation, other areas of law such as competition, contract and company law may hinder the immediate scalability of DLT.