Norbert Gehrke’s Post

Boom 💥💥 Scaling DLT-based Capital Markets: A Policy Roadmap for the EU Amazing report from AFME (Association for Financial Markets in Europe) 🌟 The Digital Transformation is Here! 🌟 Distributed Ledger Technology (DLT) promises to revolutionize #capitalmarkets in Europe. AFME highlights how DLT not only enhances efficiency and accessibility but also drives #innovation and strengthens market resilience. It's time to embrace the digital future! 🚀 💡 Tailored Regulation for a Growing Market 💡 For DLT to reach its full potential, we need a regulatory framework that promotes #technological neutrality and economic equivalence between DLT-based securities and traditional ones. The time is now! Europe has the opportunity to lead this change and set new global standards. 🌍 🔍 Key Opportunities for DLT-Based Markets 🔍 From modernizing the DLT Pilot Regime to creating cash settlement solutions, this AFME report is a strategic roadmap to overcome #regulatory barriers. It's time to open new doors to innovation in capital markets! 📈 🏦 Innovation and Resilience at the Core of the Financial System 🏦 DLT’s ability to enable decentralized settlement and mitigate single points of failure #risks is crucial. AFME advocates for a regulation that allows both centralized and decentralized settlement, promoting competition and innovation. 🔧 🌱 The Future is Green and Digital 🌱 The transition towards a more efficient and digital market is underway. AFME highlights how DLT-based bonds can drive both the digital and green transitions, simplifying processes and promoting #sustainability. Europe can lead the way towards a more sustainable financial future! 💚 👉 Read the full report and join the conversation about the future of capital markets in Europe! Joaquim Alfredo Juan Krista João Paris Javier José Luis

🌍 Recently, we released a white paper: Deciphering the European Securities and Markets Authority (ESMA)'s opinion on #MiCAR convergence.   As the Markets in Crypto-Assets Regulation (MiCAR) implementation approaches, #Europe’s digital asset landscape is set for significant change. This paper dives deep into ESMA’s July 31st opinion on broker-dealer models and best execution requirements.   Key insights include: 🏛️ Focus on broker-dealer models 🌐 Best execution challenges in a global market 🔍 Implications for non-EU firms entering the EU ✅ Practical steps toward compliance   Download the white paper below to stay ahead of the #regulatory changes impacting the #crypto sector.   For a confidential discussion on how these developments may affect your business, please reach out to Cathal Houlihan.

AFME (Association for Financial Markets in Europe) - Use of DLT and Tokenisation in Financial Markets A Proposed Vision and Policy Recommendations Source: https://lnkd.in/gA4RTy3i #interesting #afme #recommendation #vision #cryptoassets #digitalassets #dlt #asset #tokenization #financial #markets Highlights: The advent and advancement of distributed ledger technology (DLT) systems have created the opportunity for the EU to lead the world in building the capital markets and economy of the future, based on DLT and a network approach that in this submission we refer to as Technology Financial Infrastructure (TFI). Leading the world in developing TFI would enable the mobilisation through tokenisation of a wider array of EU real-world assets - including industrial and data assets – connecting these assets to capital markets as well as other areas of the economy. AFME’s global affiliate Global Financial Markets Association has estimated that DLT has the potential to create ~16tn USD global markets for illiquid assets by 2030 Moreover, TFI has the ability to enhance capital markets efficiency access for firms and citizens, by reducing cost and time of processes, from issuance of financial assets to their clearing, settlement, holding, and servicing. To illustrate this potential, it has been estimated that DLT can bring transformative benefits of ~20bn USD reduction in global clearing and settlement costs annually. As other jurisdictions are updating their regulatory frameworks and expressing their ambition to be a leader in DLT and tokenisation, the EU stands at a crossroads. The EU needs to act urgently to maintain its lead in the adoption of this technology, and capitalise on the opportunities offered by DLT to develop capital markets as well as to deliver on longstanding policy objectives such as competitiveness, innovation, and resilience. Otherwise, the EU risks falling behind As capital markets are a key link in the tokenised economy as well as a key driver of DLT-based innovation, urgent action is proposed to ensure that the EU capital markets regulatory framework provides a sustainable basis for a transition towards TFI. As such, we recommend a two-pronged route to unlocking outstanding policy and regulatory barriers: 1. Short-term ‘Quick Fixes’: specific, targeted reforms that can be applied to make the DLT Pilot Regime more attractive and a successful glidepath for testing regulatory modifications to enabling the use of DLT in capital markets on a permanent basis. 2. Longer-term permanent changes: with an eye to the longer term, there are changes that can be made to EU law to truly enable the scaling of DLT-based capital markets and pave the path towards the development of a TFI. This requires a comprehensive assessment of the compatibility between the use of DLT and the existing securities regime, which should commence as soon as possible.

The Crypto-Asset Status Report by the FSB and IMF brings needed attention to currency substitution risks tied to stablecoins in EMDEs, where foreign currency-pegged stablecoins “could reduce holdings of domestic currency... and amplify currency substitution and capital outflows in response to negative shocks.” Recognizing these risks, the FSB roadmap offers targeted recommendations for EMDEs. As a participant in the FSB’s working group that contributed to this report, I find this focus especially relevant. One critical implementation challenge for EMDEs (Box 1) is the data gap, a key barrier for regulatory responses. We’re working with Binance data to help bridge this gap and understand stablecoin flows and macroeconomic implications.

MiCA: Commission Implementing Regulation on Standardized Templates for Crypto-Asset White Papers The European Union has adopted a new regulation, (EU) 2024/2984, setting standards for crypto-asset white papers. This regulation, published on November 29, 2024, mandates standardised templates and machine-readable XBRL format for these documents. This move aims to increase transparency and comparability of information for investors while streamlining issuers' compliance. Key changes include using Legal Entity Identifiers (LEI) and Digital Token Identifiers (DTI) to reduce redundancy. The European Securities and Markets Authority (ESMA) will publish the XBRL taxonomy files to aid compliance. Though the regulation emphasises machine-readability, white papers must also remain accessible to humans. The regulation takes effect on December 23, 2025, giving stakeholders time to adapt. This initiative is a significant step towards a more transparent and efficient crypto-asset market in the EU, promoting investor protection and responsible innovation. Link to summary in contents. #MiCA #CryptoRegulation #EU #XBRL #WhitePaper #Transparency #LEI #DTI #ESMA #InvestorProtection #CryptoAssets #DigitalFinance #Innovation

Read the released report by the IMF and Financial Stability Board 👉 G20 Crypto-asset Policy Implementation Roadmap 👈 which reflects on the importance of effective, flexible, and coordinated implementation of a comprehensive policy response for crypto-assets.

A Vision for DLT and Tokenization in EU Capital Markets The Association for Financial Markets in Europe (AFME) has just released a groundbreaking report proposing a vision and policy recommendations for the use of Distributed Ledger Technology (DLT) and tokenization in financial markets. This isn't just about innovation; it's about building the EU's capital markets and economy of the future. The report highlights the transformative potential of DLT to create more efficient, accessible, and resilient markets, unlocking trillions in value by 2030. Key findings include: Increased Efficiency: DLT can significantly reduce costs and time in processes from asset issuance to clearing and settlement. Enhanced Access: Tokenization opens opportunities for a wider range of assets and market participants, promoting inclusivity and economic growth. Improved Resilience: A decentralized infrastructure can mitigate systemic risks and enhance the stability of the financial system. AFME recommends a two-pronged approach: short-term "quick fixes" to optimize the existing DLT Pilot Regime and longer-term, permanent policy changes to create a robust Technology Financial Infrastructure (TFI). This forward-thinking approach will help the EU maintain its leadership in this critical technological advancement. #fintech #DLT #tokenization #capitalmarkets #EU #innovation #futureoffinance Ascend HyFi Labs

Our latest article, is now live! Insights on the new MiCA framework, understand its impact on crypto-asset regulation, and the various services it covers. 🌐 Visit our main page at https://mica.lu and check out the full article. While you're there, don't forget to try our MiCA chatbot assistant! Our chatbot is ready to answer your questions and guide you through the intricacies of the MiCA framework. 💬 Click the link, read the article, and engage with our chatbot today! #Crypto #MiCA2024 #Blockchain #Regulation #CryptoAssets #FinTech #Innovation

Voice your opinion! The European Securities and Markets Authority (ESMA) recently published two consultation papers on guidelines under MiCA. One is on reverse solicitation and one is about the classification of crypto-assets as financial instruments. This is the third MiCA-related consultation package of ESMA which is empowered to develop technical standards and guidelines specifying certain provisions of #MiCA. Currently, one of the most pressing issues is that there is no harmonised definition of ’financial instrument’ under the Markets in Financial Instruments Directive (MiFID), and with the implementation of MiCA, the question of whether crypto-assets should be considered financial instruments was raised again. The other issue refers to the „reverse solicitation” exemption, which means that the provision of crypto-asset services or activities by a third-country firm is strictly limited under MiCA to cases where such service is initiated at the exclusive initiative of a client. ESMA states that this exemption is to be interpreted as very narrowly framed, as it cannot be a tool to circumvent MiCA. ESMA invites all stakeholders, particularly crypto-asset issuers, #CASPs in and outside the EU and financial entities dealing with crypto-assets to share their thoughts on these matters. With the guidelines subject to consultation, the aim would be to provide more guidance on when to apply this exemption and possible supervision techniques for the national competent authorities. Stakeholders have until 29 April to post their contributions on ESMA’s website. Do not miss out on the chance to shape the regulatory framework with your insight! You can download the papers from here: https://lnkd.in/diS74hMv. You can send in your opinion here: https://lnkd.in/d_SKb9mS. #micaseries #mica #micar #cryptoregulations

SEC Commissioner Uyeda lambasted the SEC's attempts to regulate private funds in remarks given to the AIMA APAC Annual Forum yesterday. He credited the success of private funds to the fact that "Congress has enacted laws that impose a far less prescriptive regulatory scheme" than ETFs or mutual funds. He criticized the SEC's doomed 2023 rule regulating private funds with additional disclosure requirements, restrictions on certain fee arrangements, and limitations on the use of side-letters because "it exceeded our statutory authority" and because "sophisticated institutional investors did not need the same protections" as provided to ETF or mutual fund investors. That rule was struck down in June this year by the Fifth Circuit. Noting that the deadline for appealing the Fifth Circuit's decision vacating the rule has passed, he commented "I hope that the SEC will take the opportunity to learn from this experience and be more mindful of the appropriate limits on our authority in the future." He also commented on Crypto, suggesting that the US is falling behind other jurisdictions in cyrpto-regulations and stating, "the SEC could do much more in addressing the key gating question of whether a crypto asset is a security." He also urged the SEC to "engage with participants in a more transparent way." It is just one commissioner's view, but worth noting.