DLT Pilot Regime
The DLT Pilot Regime is an EU framework for trading and settling securities recorded on a distributed ledger, a shared digital record. It covers eligible tokenized shares, bonds and fund units within specified limits. Operators can test this form of market infrastructure with supervisory permission and exemptions from selected existing rules.
The pilot allows trading venues, settlement systems or a system that combines both activities to operate under defined safeguards. In Germany, BaFin has permitted 21X to run a combined trading and settlement system and 360X to run a trading venue. The distinction matters because matching buyers with sellers and completing the transfer of securities are separate responsibilities.
How a securities trade settles without the pilot
In the classic setup, a trading venue such as an exchange or a multilateral trading facility (MTF) matches buyer and seller. Settlement, the exchange of securities against cash, happens afterward at a central securities depository (CSD), which keeps the register of who owns what; in Germany that is Clearstream. Each step has its own license and its own EU law: MiFID II for the venue, the CSD Regulation for settlement. Between trade and settlement, clearing calculates what each side owes, often through a central counterparty.
Those laws assume book entries in a securities account, a participant list made of banks and brokers, and cash that moves through a payment system. A blockchain where investors hold tokens in wallets and the trade settles in one transaction fits none of these definitions. Regulation (EU) 2022/858, the DLT Pilot Regime, has applied since 23 March 2023 and creates an exception for this case.
Three types of DLT market infrastructure
The regulation defines three licenses. A DLT MTF is a trading venue for tokenized financial instruments, run by an investment firm or a market operator. A DLT settlement system (DLT SS) is run by a CSD and settles on a distributed ledger. A DLT trading and settlement system (DLT TSS) combines both in one entity, which the classic rules do not allow. ESMA also lets newcomers apply for a temporary investment firm or CSD authorization together with the DLT application.
In return for the exemptions, the pilot caps what may be admitted: shares of issuers with a market capitalization below 500 million euros, bonds with an issue size below 1 billion euros, and UCITS fund units with assets under management below 500 million euros. All DLT financial instruments on one infrastructure together may not exceed 6 billion euros, as a legal analysis on JD Supra sets out. The national supervisor grants the permission, it is valid across the EU, and each permission lists the exemptions granted, for example from the rules of the CSD Regulation on book-entry form, settlement finality or cash settlement.
Who holds a permission in Germany
The list of authorized DLT market infrastructures kept by ESMA names two German operators. BaFin granted 21X a permission for a DLT trading and settlement system on 3 December 2024, with exemptions from the CSD Regulation that include settlement finality, cash settlement and participation rules. 360X received a permission for a DLT MTF on 29 April 2025. The same list names a DLT settlement system of the Czech central securities depository, a DLT TSS in Lithuania and one in France.
21X settles trades between tokenized securities and e-money tokens on chain, so the cash leg runs in a regulated euro stablecoin. E-money tokens are the MiCA category for stablecoins that reference one official currency. For settlement in central bank money, the Eurosystem has connected DLT platforms with T2 through Pontes since 21 September 2026. Which German law makes a security exist only as a register entry is a separate question, answered by the Electronic Securities Act: it defines the instrument, while the pilot regime licenses the venue and the settlement.
From pilot to permanent rules
The regulation started as an experiment with a review clause. In June 2025 ESMA suggested making the regime permanent and setting thresholds and eligible assets according to the risk of each business model, after what it called an initially limited uptake. The market integration and supervision package that the European Commission adopted on 4 December 2025 amends the pilot regime as part of the savings and investments union.
For a bank or asset manager in Germany, the practical questions are where a tokenized bond can be listed, which custodian holds the token for clients, and which form of money settles the trade. The panel on DLT-based market infrastructures at the Frankfurt Forum on Digital Assets & Applications, with DekaBank, 360X, 21X and Seturion, dealt with these choices.
DLT Pilot Regime review and amendments
The proposal of the Commission raises the cap on the market value of DLT financial instruments on one infrastructure from 6 billion to 100 billion euros, and smaller operators get a simplified regime up to 10 billion euros, as the ECB Macroprudential Bulletin of April 2026 summarizes. Crypto-asset service providers under MiCA could run DLT market infrastructures, more financial instruments would be eligible, and operators could request exemptions that the current pilot does not foresee.
Permissions would no longer end after six years, and new licenses would cover firms that only provide DLT-based notary or central maintenance services. The CSD Regulation would allow the cash leg to settle in e-money tokens or in tokenized central bank and commercial bank money, and the proposed Settlement Finality Regulation would let DLT-based systems be designated as settlement systems. The European Parliament and the Council negotiate the texts, and law firms such as CMS and Baker McKenzie expect the talks to last into 2027.
Upcoming events on tokenized securities in Germany
Finance Loop and the DLT Pilot Regime
Finance Loop and 21X, the holder of the German DLT TSS permission, announced a cooperation on on-chain finance, with joint events and knowledge sharing. The pilot regime is also a regular subject at the Crypto Assets Conference, which Finance Loop has partnered with and which Frankfurt School organizes together with Deutsche Börse.
What is the DLT Pilot Regime?
The DLT Pilot Regime is EU Regulation 2022/858, which has applied since 23 March 2023. The DLT Pilot Regime lets licensed operators trade and settle tokenized shares, bonds and fund units on a distributed ledger, with exemptions from MiFID II and the CSD Regulation, within fixed size limits.
Which instruments can be traded under the pilot?
Today the pilot admits shares of companies with a market capitalization below 500 million euros, bonds with an issue size below 1 billion euros and UCITS units with less than 500 million euros under management. Crypto-assets such as bitcoin fall under MiCA instead.
Will the DLT Pilot Regime become permanent?
ESMA recommended it in June 2025, and the market integration package of the Commission of 4 December 2025 would remove the time limit on permissions and raise the cap to 100 billion euros. The outcome depends on the legislative process in the European Parliament and the Council.
DLT Pilot Regime and Finance Loop
Finance Loop covers the DLT Pilot Regime in its Investment & Digital Assets track, next to tokenized bonds, funds and the German Electronic Securities Act. Finance Loop has a cooperation with 21X and brings people from banks, asset managers, exchanges and their lawyers together at events in Frankfurt, Munich, Berlin and Hamburg.
Finance Loop is a professional network supporting the institutional use of emerging technologies in finance, such as AI, tokenization, stablecoins, and DeFi. Finance Loop helps its members build skills and personal networks in these fields: Investment & Digital Assets, Payments & Digital Money, Digital Infrastructure & Sovereignty, and Risk & Compliance.