On 3 April 2024, the Chair of the European Securities and Markets Authority (ESMA) Verena Ross, wrote a letter to Mairead McGuinness (European Commissioner for Financial Services, Financial Stability and Capital Markets), Irene Tinagli (Chair of the Committee on Economic and Monetary Affairs) and Vincent van Peteghem (President of the Economic and Financial Affairs Council of the European Union) concerning the uptake of distributed ledger technology (DLT) by financial market infrastructures in the context of the DLT Pilot Regime.

Given that no DLT market infrastructures have been authorised yet, the letter states that ESMA does not intend to publish a report. However, the letter does constitute an update on the status of the applications submitted so far, and highlights the main challenges observed by respective Member State competent authorities (NCAs).It provides that as of 3 April 2024, four official applications have been submitted. The applications are currently under assessment by the respective NCAs, who have also raised questions arising from the applications for discussion at ESMA’s DLT Working Group. Around eight other potential applications may be submitted during the course of 2024.

In terms of challenges, NCAs have suggested that the novelty of the regime may explicate its relatively slow uptake. In addition, the annex of the letter details some other challenges for further consideration by the relevant Commission services. It suggests that the Commission could clarify some aspects to support the increased uptake of the regime, such as those related to innovative solutions for cash settlement, the use of self-hosted wallets, the scope and thresholds of admitted DLT financial instruments, as well as the duration of the DLT Pilot Regime.