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Distributed Ledger Technology (DLT)
Over the past months, Distributed Ledger Technology (DLT), often referred to as Blockchain, has stirred a lot of interest and enthusiasm across the financial industry. Although discussions are still at a very early stage, DLT is believed to have the potential to substantially change the way financial markets are operating today, promising important cost savings and efficiency gains in particular in the post-trade space. Regulators and law makers around the world, concerned with the regulatory implications of the technology, are increasingly joining the debate. This webpage aims to provide an overview of the most important contributions, focusing on key early regulatory initiatives in this space but also referencing some of the most important industry initiatives and selected other research on DLT. The aim is not to offer a comprehensive list of available sources on DLT but to limit the overview to the key initiatives. The list will be updated on an ongoing basis as the discussions on DLT are evolving and the impacts are becoming more clear.

FinTech, DLT and Regulation

Distributed ledger technology (DLT) or blockchain technology has attracted increasing attention from regulators and supervisors in recent months. This article was first published in ICMA’s Quarterly Report Q2 2017 (Issue 45) and seeks to provide a high-level, albeit non-exhaustive, overview of the potential benefits and challenges from a regulatory perspective.

Download “FinTech, DLT and Regulation” (6 April 2017)

An introductory Q&A on blockchain technology

The ICMA article explains the basics of DLT in the form of an introductory Q&A which was first published in October 2015 as part of ICMA’s Quarterly Report 4Q 2015. The article addresses three questions: (i) What is a blockchain? (ii) How does it work in practice? (iii) Why is this relevant for financial markets?

Download the Introductory Q&A on Blockchain (9 October 2015)

Official sources

ESMA: Discussion Paper on Report on The Distributed Ledger Technology Applied to Securities Markets (January 2017) following a Discussion Paper (published on 2 June 2016 for consultation). This follows up on an earlier Call for evidence on Investment using virtual currency or distributed ledger technology (published on 22 April 2015) and the responses received to that consultation.

European Parliament: ECON Draft Report on FinTech: the influence of technology on the future of the financial sector - 2016/2243(INI) (published on 27 January 2017); ECON report on virtual currencies (adopted by the ECON Committee on 26 April 2016)

ECB: Occasional paper series: Distributed ledger technologies in securities post-trading Revolution or evolution? (22 April 2016); and related speech by ECB Executive Board member Yves Mersch: Distributed ledger technology – panacea or flash in the pan? (25 April 2016)

UK Government Office for Science: Distributed ledger technology: Blackett review (January 2016)

BIS (Committee on Payments and Market Infrastructures): Reports on Distributed ledger technology in payment, clearing and settlement – An analytical framework (February 2017), and Digital Currencies (23 November 2015)

FINRA: Distributed Ledger Technology: Implications of Blockchain for the Securities Industry (January 2017)

IOSCO: Research Report on Financial Technologies (February 2017)

Selected other research

SWIFT Institute: The Impact and Potential of Blockchain on the Securities Transaction Lifecycle (9 May 2016)

Some key industry initiatives

A multitude of industry initiatives are under way to develop use cases on DLT, among which several important collaborative cross-industry initiatives, including:

Post Trade Distributed Ledger group (PTDL): PTDL is a London-based industry group that aims to provide a forum where financial institutions can explore and share ideas about how DLT can transform the post-trade space. The membership is diverse and includes nearly 40 financial institutions and prominent market infrastructures.

Hyperledger Project: The Hyperledger initiative was launched in December 2015. The project is led by the Linux Foundation and involves both major financial institutions and large technology firms. The idea is to provide an environment to identify and address important features for a cross-industry open standard for distributed ledgers. Members include well-known blockchain start-ups such as the R3 Consortium (see below) and Digital Asset Holdings (DAH).

R3 Consortium: R3 is a New York based start-up which leads a consortium partnership with over 40 of the world's largest banks. It aims to provide a forum for the creation of common standards for the use of DLT in finance and create blockchain applications. Unlike the other two initiatives, R3 is a commercial venture.

A more detailed overview of industry initiatives is available here (financial news).


Alexander Westphal
Director, Market Practice and Regulatory Policy, Secretary to the ICMA European Repo and Collateral Council (ERCC)
Direct line: +44 20 7213 0333

Gabriel Callsen
Associate, Market Practice and Regulatory Policy
Direct line: +44 20 7213 0334