The European Fund and Asset Management Association (Efama) has urged EU policymakers to speed up reforms to the digital assets framework, highlighting how distributed ledger technology (DLT) could break through many barriers to capital markets integration.
In response to the European Commission’s Savings and Investment Union consultation, Efama stated that DLT could address fragmented post-trade infrastructures, limited competition and cross-border flows among financial market infrastructures and national divergences in securities, taxation and insolvency laws.
DLT offers “a pathway to bypass politically sensitive obstacles in Europe’s post-trade ecosystem”, stated the trade body.
The digital assets framework is the EU’s rulebook for how crypto-assets, stablecoins, and tokenised securities are issued, traded and settled using distributed ledger technology.
The association said market participants using the EU’s DLT Pilot Regime want a smooth transition to a permanent framework that ensures scalability, competition and a level playing field with traditional players.
It warned that regulatory changes in other jurisdictions outside the EU, combined with the growth of DLT assets, make it urgent for Europe to act.
Efama recommended a “multipolar” DLT payment ecosystem, giving investors settlement options such as the European Central Bank’s wholesale central bank digital currency, tokenised deposits, commercial bank money tokens and crypto-assets regulated under the Markets in Crypto-Assets (MiCA) framework. It said this diversity would encourage competition and innovation while reducing reliance on any single mechanism.
All Ucits categories gain despite market uncertainty: Efama
The association urged rule changes so Ucits can invest in and hold MiCA-compliant e-money tokens as securities, payment instruments, or both and called for guidance on the eligibility of MiCA-regulated stablecoins. Efama also said tighter rules may be needed for double-issuance models, reserve assets and asset types, citing investor protection concerns raised in the US Genius Act.
Efama also proposed amending Article 3(2) of the Central Securities Depositories Regulation (CSDR) to remove registration requirements it said “discriminate” against tokenised assets. It added that unbundling CSD services could lower costs for investors and support asset managers’ fiduciary duties. Other priorities include making the DLT Pilot Regime permanent with broader scope, and improving interoperability between CSDs and DLT registers, passporting for DLT operators and cash settlement options under CSDR.
Tanguy van de Werve, director general, Efama, commented: “A great number of European firms from across the value chain have made impressive investments in DLT, and are leading the financial sector in the digital transition. These efforts should be matched at the highest political level with a clear commitment from EU authorities to deliver on a DLT-based ecosystem. Piecemeal changes, weighed down by lengthy legislative processes, will not give the market the necessary signals for further investments. A comprehensive plan with an ambitious timeline is what is needed.”
