Experimenting with the distributed ledger technology: A comparison between the EU DLT Pilot Regime Regulation and the UK Digital Securities Sandbox

43 Pages Posted: 24 Sep 2024

See all articles by Randy Priem

Randy Priem

United Business Institutes; Financial Services and Markets Authority (FSMA); University of Antwerp - Antwerp Management School; KU Leuven; Saint-Louis University, Brussels

Date Written: August 24, 2024

Abstract

This article provides a comprehensive comparison between the European DLT Pilot Regime Regulation and the UK Digital Securities Sandbox, which both have the intention for market infrastructures to experiment with the distributed ledger technology (DLT). It has been documented that regional regulatory sandboxes can raise the concern of potential regulatory arbitrage and a 'race to the bottom' competition among jurisdictions, which necessitates a detailed examination of whether one sandbox is more flexible or easier to experiment with compared to another. The paper concludes that the UK DSS provides more flexible powers to the UK authorities and is broader in scope in terms of potential participants, the type of technology one can experiment with, the type of activities that can be performed, the type of financial securities one can experiment with, and the limits participants are subject to. Yet, this paper does not conclude that the UK DSS is in general less stringent than the EU DLT Pilot Regime as no deregulation is foreseen in the UK DSS for trading venues that want to experiment with the technology. In addition, the UK foresees a stringent structured approach with 'stages' and 'gates' to be passed to continue the experimentation.

Keywords: trading and post-trading, distributed ledger technology, blockchain, financial innovation, financial regulation

Suggested Citation

Priem, Randy, Experimenting with the distributed ledger technology: A comparison between the EU DLT Pilot Regime Regulation and the UK Digital Securities Sandbox (August 24, 2024). Available at SSRN: https://ssrn.com/abstract=4935361 or http://dx.doi.org/10.2139/ssrn.4935361

Randy Priem (Contact Author)

United Business Institutes ( email )

Naamsestraat 48
Brussels, 1000
Belgium

Financial Services and Markets Authority (FSMA) ( email )

Rue du Congrès/Congresstraat 12-14
Brussels, 1000
Belgium

University of Antwerp - Antwerp Management School ( email )

Boogkeers 5
Antwerp, 2000
Belgium

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Saint-Louis University, Brussels ( email )

43 Boulevard du Jardin botanique
Brussels, 1000
Belgium

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