French,Italian Regulators Seek EU Blockchain Framework Overhaul

French and Italian market regulators have submitted recommendations to the European Commission aimed at enhancing the regulatory framework for blockchain and distributed ledger technology (DLT) in European financial markets. The Autorité des Marchés Financiers (AMF) of France and the Commissione Nazionale per le Società e la Borsa (CONSOB) of Italy proposed adjustments to support broader experimentation and integration of DLT into existing market infrastructure.

The recommendations come in response to the underwhelming performance of the EU’s Pilot Regime, introduced in March 2023. The Pilot Regime was designed to provide a legal environment for testing blockchain-based systems for trading, settlement, and custody of financial instruments. Despite rising interest in DLT, the Pilot Regime saw limited adoption and missed its objectives.

The regulators have urged the European Commission and co-legislators to adjust the framework to better support market testing and development. Marie-Anne Barbat-Layani, AMF Chair, emphasized the importance of a competitive framework to encourage innovation and market testing of DLT. The regulators outlined three key areas for improvement: a more flexible regulatory framework, broadening the scope of the Pilot Regime, and developing interoperability between DLT infrastructure and traditional financial systems.

First, the regulators call for a more flexible regulatory framework that encourages experimentation by offering proportionality based on the size and nature of the projects. This would lower barriers for firms seeking to experiment with DLT applications. They also emphasized the importance of enhancing the role of the European Securities and Markets Authority (ESMA) to ensure consistent implementation across the EU.

Second, the AMF and CONSOB proposed broadening the scope of the Pilot Regime by raising eligibility and capitalisation limits to accommodate larger-scale projects. This would allow for the inclusion of a wider range of financial products, including structured bonds and derivatives. They also recommend extending the duration of the Pilot Regime to provide greater long-term visibility for investors.

Finally, the regulators emphasized the importance of developing interoperability between DLT infrastructure and traditional financial systems. They argue that establishing common standards at the European level would simplify processes for all stakeholders and promote greater market awareness of DLT’s potential.

While the AMF and CONSOB push for regulatory improvements, other European institutions are already advancing DLT initiatives at the national level. In March 2025, the Boerse Stuttgart Group launched the first Swiss market for trading digital securities via blockchain. BX Digital, its subsidiary, has received authorization from FINMA to operate a DLT trading system. The platform supports secondary market trading of tokenized assets such as stocks, bonds, and funds on Ethereum. Integration with the Swiss payment infrastructure is expected to attract further participation from banks and financial institutions, driving the tokenization of traditional assets.

As the European Commission considers these proposals, the outcome could influence how blockchain and DLT is adopted across the EU. If changes are made, they could provide a clearer path for future experimentation and integration of blockchain in Europe’s financial ecosystem. The proposed changes may ease the merger of digital trials with established financial practices, supporting a range of project sizes and adaptive market methods. This could broaden digital ledger trials and rethink the link between emerging blockchain practices and traditional finance.