DLT Trading Facilities and Market Infrastructure

1. Global Landscape --- DLT Infrastructure Models

Across the 21 jurisdictions surveyed, regulators have adopted five distinct models for integrating distributed ledger technology into securities market infrastructure. Each model reflects different assumptions about the maturity of DLT, the appropriate level of regulatory accommodation, and the role of incumbent financial institutions. Several jurisdictions sit in more than one model (the eight EU/EEA members share Model A through the DLT Pilot Regime while also applying technology-neutral national infrastructure), and four jurisdictions --- Cayman Islands, British Virgin Islands, Ireland, and Abu Dhabi (ADGM) --- are integrated below alongside the original seventeen.

Model A: DLT-Specific Licensing Regime

Jurisdictions:

EU (DLT Pilot Regime) and its member states applying it (

France,

Germany,

Luxembourg,

Ireland;

Liechtenstein as an EEA member with MiCAR but no DLT Pilot authorization to date),

Switzerland (DLT Trading Facility under FMIA)

Statute references:

• EU: Regulation (EU) 2022/858 (DLT Pilot Regime), applicable 23 March 2023
• Switzerland: Financial Market Infrastructure Act (FMIA) Articles 73a--73e, as amended by the DLT Act (Federal Act on the Adaptation of Federal Law to Developments in DLT), effective 1 August 2021

Authorized entities:

• EU: Investment firms, market operators (MiFID II-authorized), CSDs (CSDR-authorized). Under the adopted Market Integration Package (4 December 2025), MiCA-authorized CASPs operating trading platforms would also become eligible.
• Switzerland: Swiss legal entities meeting capital and organizational requirements. Two tiers: standard DLT trading facility (CHF 1M--5M capital) and small DLT trading facility (CHF 500K capital, with volume thresholds).

Outcomes:

• EU: Six authorized DLT market infrastructures appear on the ESMA register as of January 2026 --- CSD Prague (DLT SS, October 2024), 21X AG (DLT TSS, December 2024), 360X AG (DLT MTF, April 2025), Axiology (Lithuania --- Baltic DLT SS/TSS), LISE (France, DLT TSS, October 2025), and Securitize (Spain/CNMV, DLT TSS, November 2025). ESMA's June 2025 Article 14 review acknowledged low uptake and recommended permanence and dramatically expanded thresholds; the Commission's December 2025 package responded.
• Switzerland: SDX Trading AG and SIX Digital Exchange AG received stock exchange and CSD licenses (September 2021) under existing FMIA categories. BX Digital AG received the first (and, per FINMA's April 2026 confirmation, sole) DLT trading facility license on 12 March 2025 (effective 14 May 2025).

Sources:

• ESMA -- DLT Pilot Regime
• FINMA -- Licensing as a DLT Trading Facility
• FINMA -- First DLT Trading Facility License (18 March 2025)

Model B: Sandbox / Experimental Approach

Jurisdictions:

UK (Digital Securities Sandbox),

South Korea (FSC Regulatory Sandbox), British Virgin Islands (Financial Services Regulatory Sandbox),

Cayman Islands (VASP Phase 3 Sandbox Licence, pending)

Statute references:

• UK: Financial Services and Markets Act 2023, Sections 13--17; SI 2023/1398 (DSS Regulations), effective 8 January 2024
• South Korea: Financial Investment Services and Capital Markets Act (FSCMA) and Electronic Securities Act (AERSB) amendments passed by the National Assembly 15 January 2026, effective January 2027; sandbox designations under the FSC special regulatory sandbox
• British Virgin Islands: Financial Services (Regulatory Sandbox) Regulations 2020 (open since October 2020), with VASPs expressly permitted to participate
• Cayman Islands: VASP Act (2024 Revision) Phase 3 Sandbox Licence (pending)

Authorized entities:

• UK: Firms legally established in the UK, of all sizes and stages. DSS participants progress through four gates: Gate 1 (testing), Gate 2 (live under initial limits), Gate 3 (scaling), Gate 4 (permanent authorization pathway). Joint FCA/Bank of England oversight.
• South Korea: Six companies received FSC sandbox designations for tokenized real estate trust beneficiary securities. Two STO exchange consortia --- KDX (led by Korea Exchange/KRX, score 725) and NXT (led by Nextrade, score 750) --- received preliminary designation from the FSC on 13 February 2026; Lucentblock was eliminated.
• British Virgin Islands: VASPs may enter the FSC sandbox; 14 VASPs were registered with the FSC as of 30 July 2025 (no dedicated DLT market-infrastructure regime).
• Cayman Islands: The Phase 3 VASP Sandbox Licence and new virtual-asset-issuance provisions remain pending.

Outcomes:

• UK: 16 Gate 1 entrants as of December 2025, including HSBC, J.P. Morgan Securities, Euroclear, Tradeweb, and LSEG B3. No firm had progressed to Gate 2 as of the Bank of England's last dashboard update, though BPX Markets submitted its Gate 2 application in early 2026. DSS operational period ends December 2028.
• South Korea: STO exchange licensing is the first formal market infrastructure for tokenized securities in Korea. The full legislative framework takes effect January 2027.
• British Virgin Islands: The sandbox functions as a structuring/onboarding pathway; the territory deliberately leaves market-infrastructure and retail distribution to onshore venues.
• Cayman Islands: No domestic DLT market-infrastructure pilot has yet launched; the closest analogue is the VASP virtual asset trading platform licence (an AML/prudential, not a securities-market-infrastructure, permission).

Sources:

• Bank of England -- Digital Securities Sandbox Dashboard
• FCA -- Digital Securities Sandbox
• Korea Times -- Nextrade, Korea Exchange consortia win nod for STO platforms (13 February 2026)

Model C: Existing License with DLT Permissions

Jurisdictions:

Singapore (RMO under SFA),

US (ATS under Regulation ATS),

Canada (marketplace/CTP under NI 21-101)

Statute references:

• Singapore: Securities and Futures Act 2001 (SFA), Part IIIA (Recognised Market Operators); MAS Guide on the Tokenisation of Capital Markets Products (re-issued 14 November 2025)
• US: Securities Exchange Act of 1934, Regulation ATS (Rules 300--303); Nasdaq tokenized-securities rule change SEC-approved 18 March 2026 (Release 34-105047); DTC tokenization no-action letter (11 December 2025)
• Canada: National Instrument 21-101 (Marketplace Operation); CSA Staff Notices; crypto trading platforms (CTPs) transitioning to investment-dealer registration with CIRO membership

Authorized entities:

• Singapore: Entities holding a Capital Markets Services (CMS) licence and approved as Recognised Market Operators (RMOs) or Approved Exchanges. ADDX (ICHX Tech), InvestaX, and DBS Digital Exchange are the principal licensed platforms; Marketnode (SGX-Temasek JV) provides infrastructure.
• US: SEC-registered broker-dealers operating as Alternative Trading Systems. Key operators: Securitize Markets, tZERO Securities, INX Securities, Prometheum Ember Capital. Nasdaq received SEC approval on 18 March 2026 to trade tokenized securities on its exchange (go-live targeted Q3 2026).
• Canada: CTPs that trade securities or derivatives must register; no dedicated DLT-venue pilot regime exists. Project Samara (EDC, Bank of Canada, RBC, TD) delivered Canada's first regulator-approved tokenized bond as an OSC/AMF/CIRO-approved test.

Outcomes:

• Singapore: ADDX surpassed US$2 billion in total transaction volume. DBS Digital Exchange operates secondary trading of tokenized assets under DBS's full banking and CMS licenses. Project Guardian, a multi-year MAS-led initiative with 40+ industry participants, has produced the Guardian Fixed Income and Guardian Funds Frameworks.
• US: Securitize Markets serves as the platform and transfer agent for BlackRock's BUIDL fund (exceeding $2.5 billion AUM); tZERO transacted over $60 billion in trading volume in 2025 and received FINRA approval in December 2025 to offer retail access to tokenized mutual funds. The DTC no-action letter enables a three-year pilot for tokenizing DTC-custodied assets, expected to launch H2 2026. The SEC approved Nasdaq's tokenized-securities trading rule on 18 March 2026, with go-live targeted Q3 2026; trades will settle T+1 conventionally through NSCC/DTC rails.
• Canada: Project Samara issued Canada's first tokenized bond (CAD 100M, sub-three-month tenor) on Hyperledger Fabric in March 2026, settled in wholesale central bank deposits with near-instant atomic settlement; CSA Project Tokenization (launched 31 March 2026) is exploring a standing policy.

Sources:

• MAS -- Project Guardian
• Securitize
• tZERO -- Receives Approval to Offer Retail Access to Tokenized Mutual Funds
• Nasdaq -- Q&A on Tokenized Securities Proposal

Model D: Free Zone / Offshore Special Regime

Jurisdictions:

UAE (VARA, DIFC DFSA), Abu Dhabi (ADGM FSRA),

Cayman Islands (CIMA), British Virgin Islands (FSC)

Statute references:

• Abu Dhabi (ADGM): Financial Services and Markets Regulations 2015 (FSMR), as amended 10 June 2025; FSRA Digital Securities Guidance (VER02, 24 February 2020); DLT Foundations Regulations 2023
• DIFC: DFSA Rulebook, Investment Token regime (2021), Tokenisation Regulatory Sandbox (March 2025)
• Dubai (VARA): Dubai Law No. 4 of 2022; Virtual Asset Issuance Rulebook effective 19 June 2025
• Cayman Islands: VASP Act (2024 Revision); SIBA (2020 Revision); Mutual Funds Act and Private Funds Act (2025 Revision) as amended by three 2026 Acts (tokenised-funds framework in force 24 March 2026)
• British Virgin Islands: SIBA 2010; VASP Act 2022 (in force 1 February 2023); BVI Business Companies Act 2004

Authorized entities:

• Abu Dhabi (ADGM): Financial Services Permission (FSP) holders authorized to operate a Multilateral Trading Facility, or a Recognised Investment Exchange (RIE) by Recognition Order. Digital securities are deemed securities (FSMR s. 58(2)(b)) and regulated identically to conventional counterparts. OTFs are not permitted for digital securities (non-discretionary trading required). Custody/settlement must sit in a separately licensed legal entity (DSF or RCH).
• DIFC: DFSA-licensed firms. The Tokenisation Regulatory Sandbox attracted 96 expressions of interest from the UAE, UK, EU, Canada, Singapore, and Hong Kong; scope limited to financial assets (bonds, sukuk, fund units).
• Dubai (VARA): VARA-licensed VASPs across seven activity categories, including an exchange-services category.
• Cayman Islands: No recognised securities exchange for tokenized RWA secondary trading; tokenised fund interests transfer via operator-approved transfers reconciled to book-entry registers. The VASP virtual asset trading platform licence is the closest market analogue (AML/prudential, not securities-market-infrastructure).
• British Virgin Islands: No domestic retail trading venues; trading is via VASP virtual-asset-exchange registration (US$10,000 application / US$25,000 initial), with SIBA rules applying where the token is an investment. 14 VASPs registered as at 30 July 2025.

Outcomes:

• Abu Dhabi (ADGM): The Realize T-BILLS Fund (OEIC, $RBILL on Ethereum and IOTA) launched 31 October 2024 as the first tokenized fund domiciled in/approved by FSRA; the Dedicated Settlement Facility (DSF) supports atomic/instantaneous DvP. ADGM's DLT Foundations regime (2023) was the world's first dedicated DLT Foundations/DAO framework.
• UAE (Dubai): The Dubai Land Department's Real Estate Tokenisation Project (March 2025) tokenizes property title deeds; a USD 5m tokenized-real-estate secondary market settled via the XRP Ledger in February 2026. The UAE operates parallel regulatory regimes (VARA, ADGM FSRA, DIFC DFSA, plus federal CMA), each with its own classification, licensing, and supervision.
• Cayman Islands: The 2026 tokenised-funds framework channels tokenized fund interests into the existing funds/securities regimes (excluded from the VASP regime); nine tokenised investment funds were conditionally registered with CIMA by 29 April 2026 --- but there is no DLT market infrastructure or settlement statute.
• British Virgin Islands: A structuring-venue-first model (token-issuer/fund/SPV domicile) that deliberately leaves market infrastructure and retail distribution to onshore venues.

Sources:

• ADGM FSRA -- Digital Securities Guidance
• ADGM FSRA -- Amendments to Digital Asset Framework
• DFSA -- Tokenisation Regulatory Sandbox
• VARA -- Virtual Asset Issuance Rulebook

Model E: Technology-Neutral (Existing Framework Applied to DLT)

Jurisdictions:

Hong Kong (SFC under SFO),

Japan (JFSA under FIEA),

Australia (ASIC under the Corporations Act / DAF Act 2026),

Bahrain (CBB under the CRA Module)

Statute references:

• Hong Kong: Securities and Futures Ordinance (SFO); SFC tokenization circulars (2 November 2023; updated 20 April 2026); ASPIRe roadmap (February 2025)
• Japan: Financial Instruments and Exchange Act (FIEA), as amended May 2020 and November 2024; Electronically Recorded Transferable Rights (ERTR) classification
• Australia: Corporations Act 2001; the Corporations Amendment (Digital Assets Framework) Act 2026 (No. 38 of 2026, Royal Assent 8 April 2026) introduces DAP/TCP categories but commences 9 April 2027; INFO 225 (October 2025) governs the transition
• Bahrain: CBB Rulebook Volume 6 Crypto-Asset Module (CRA), amended March 2023 for Digital Token Offerings

Authorized entities:

• Hong Kong: SFC-licensed intermediaries holding Type 1 (dealing), Type 7 (automated trading services), or Type 9 (asset management) licenses, plus VATP licensing under AMLO. 13 VATPs licensed as of early 2026.
• Japan: Type I Financial Instruments Business Operators (FIBOs) registered with the JFSA, operating a proprietary trading system (PTS) through JSTOA-approved infrastructure. The Japan Security Token Offering Association (JSTOA) provides self-regulatory governance.
• Australia: Australian Financial Services Licence (AFSL) holders today; from 9 April 2027, Digital Asset Platform (DAP, operator-held tokens, trading + custody) and Tokenised Custody Platform (TCP, single token per asset) authorizations; market operators need an AFSL/markets licence.
• Bahrain: CRA Category 4 licensees operate order-book crypto exchanges; Categories 1--3 cover advisory, agent/custody, and principal/OTC activity.

Outcomes:

• Hong Kong: The HKSAR Government has issued three rounds of digital green bonds (HKD 800M in 2023, HKD 6B in 2024, HKD 10B in November 2025). The SFC's 20 April 2026 circular permits 24/7 secondary trading of tokenised SFC-authorised products on VATPs (on-platform retail; OTC case-by-case), with an initial focus on tokenised money-market funds. Project Ensemble (HKMA), with the EnsembleTX real-value pilot from 13 November 2025, explores wholesale CBDC and tokenised-deposit settlement.
• Japan: Cumulative public STO issuance reached JPY 333.3 billion by FY2025 (roughly double the prior year), with real estate trust beneficiary certificates accounting for ~85%. Osaka Digital Exchange (ODX) START Market held 8 tokens / JPY 33.6 billion combined market cap as of 31 March 2026. A "native" on-chain security-token pilot (Nomura, SBI, Daiwa, MUFG) is reported but NOT VERIFIED.
• Australia: Project Acacia (RBA/DFCRC) released its final report on 18 May 2026, covering 20 wholesale tokenised-asset use cases; the ASX's CHESS DLT replacement was abandoned in November 2022 (~AUD 250m write-down) in favour of a non-DLT rebuild. Tokenized-issuance activity remains lighter than Japan or Hong Kong.
• Bahrain: ATME offers tokenized investment products including tokenized gold (1kg per token); Rain (a Category 3 principal) was the first ME-licensed exchange and has expanded into ADGM/Abu Dhabi. Atomic settlement is NOT VERIFIED in the source matrix.

Sources:

• SFC -- ASPIRe Roadmap
• Nomura Holdings / BOOSTRY -- Japan ST Market Report FY2025
• RBA -- Project Acacia
• CBB -- Crypto-Asset Module

2. EU DLT Pilot Regime Deep Dive

The DLT Pilot Regime is the cornerstone of Model A and applies uniformly across the eight EU/EEA jurisdictions surveyed ---

EU,

France,

Germany,

Luxembourg,

Ireland (all EU members with the regime in force from 23 March 2023), plus

Liechtenstein as an EEA member (MiFID II passporting and MiCAR applicability, but no DLT Pilot authorization reported to date).

Switzerland runs a parallel permanent statutory regime rather than the pilot.

2.1 Three Infrastructure Types

The DLT Pilot Regime (Regulation EU 2022/858) creates three categories of DLT market infrastructure, each requiring a different underlying authorization:

The DLT TSS is the most innovative category, enabling a single operator to provide integrated trading, clearing, and settlement on DLT --- eliminating the traditional separation between trading venues and post-trade infrastructure.

2.2 Thresholds and Caps

Source: Bird & Bird -- European Commission Introduces Market Integration and Supervision Package; ESMA -- DLT Pilot Regime Report (25 June 2025)

2.3 All Authorized Entities (as of January 2026)

ESMA's public register lists six authorized DLT market infrastructures as of January 2026 --- up from the three of mid-2025:

Germany produced two of the first three authorized entities, reflecting both BaFin's supervisory capacity and Germany's advanced national DLT framework (eWpG).

France (LISE) and Spain (Securitize via CNMV, an

EU NCA) joined in late 2025, with the Lithuania-supervised Axiology rounding out the register.

Source: 21X -- Historic EU License Press Release (3 December 2024); Goodwin -- DLT Pilot Regime ESMA Report

2.4 ESMA Review Findings (June 2025)

ESMA published its Article 14 review report on 25 June 2025. Key findings:

1. Low uptake: Only three authorizations in over two years of the regime being available (the register has since grown to six). Trading activity remains low. Multiple applicants abandoned the process due to complexity.
2. Thresholds too restrictive: ESMA recommended tiered and adjustable thresholds, extending the scope of eligible assets (including complex and illiquid assets), and removing activity-based thresholds entirely.
3. Permanence recommended: ESMA advised the regime should not have a fixed expiry date --- consistent with the European Commission's May 2024 public commitment.
4. Interoperability gap: Lack of interoperability with traditional financial infrastructure was identified as a major barrier to adoption.
5. Central bank money gap: Limited access to central bank money for DLT settlement was identified as critical. The ECB's Pontes/Appia initiatives (see Section 5) are the intended solution.

Source: ESMA -- DLT Pilot Regime Report; DLA Piper -- ESMA Suggests Amendments to DLT Pilot Regime

2.5 Market Integration Package (Adopted December 2025)

The European Commission adopted its Market Integration and Supervision Package on 4 December 2025, proposing transformative changes:

• Threshold increase: EUR 6 billion to EUR 100 billion aggregate market value
• Simplified regime: New proportionate tier for smaller operators handling up to EUR 10 billion
• Expanded operators: MiCA-authorized CASPs operating trading platforms become eligible
• Expanded assets: All MiFID II financial instruments (not just shares, bonds, and UCITS units)
• Permanence: No time limits on authorizations
• Settlement in e-money tokens: CSDs may use MiCA-authorized e-money tokens for settlement
• Settlement Finality Directive conversion: Proposed conversion to a directly applicable Regulation with technology-neutral, DLT-compatible definitions

A coalition of 39 financial and technology firms (including Boerse Stuttgart and Nasdaq) urged on 21 April 2026 that the upgrade be fast-tracked, proposing an even higher EUR 150 billion limit. Trilogue negotiations are expected through 2026--2027, with implementation anticipated between 2027 and 2029.

Source: Ashurst -- EU's Market Integration Package: DLT Need to Know; DLA Piper -- EU Capital Markets Overhaul

3. Notable DLT Trading Facilities and Infrastructure Worldwide

3.1 Switzerland: SIX Digital Exchange (SDX)

SDX is among the world's first fully regulated financial market infrastructures for digital assets, operated by SIX Group. FINMA authorized SDX Trading AG (stock exchange license) and SIX Digital Exchange AG (CSD license) on 10 September 2021.

Critical observation: Despite technological readiness, secondary market activity remains "entirely concentrated in the traditional market" infrastructure, according to a SUERF policy brief. Primary issuance works; secondary liquidity has not migrated.

Source: SIX Group -- SDX Digital Bonds Milestone: Over CHF 1 Billion (May 2024); SDX -- SIX Digital Exchange Gets Regulatory Approval from FINMA; SUERF -- Towards Tokenised Bond Markets? Lessons from Switzerland

3.2 Switzerland: BX Digital AG

BX Digital AG, a sister company of BX Swiss AG exchange (Boerse Stuttgart Group), received the first DLT trading facility license from FINMA on 12 March 2025 (effective 14 May 2025) and is, per FINMA's April 2026 confirmation, the sole (small) DLT trading facility licensee. It operates on the Ethereum public blockchain, settling via DvP smart contracts and connected to the SIC payment system for fiat.

Source: FINMA -- First DLT Trading Facility License; Baker McKenzie -- Swiss Regulator Issues First DLT Trading Facility License to BX Digital AG

3.3 Germany: 21X AG and 360X AG

Germany hosts two of the early EU DLT Pilot Regime authorized entities:

• 21X AG (DLT TSS, December 2024): First fully regulated blockchain trading and settlement venue in the EU; uses Polygon; fully operational from 8 September 2025; AMINA Bank became its first regulated bank listing sponsor on 9 March 2026.
• 360X AG (DLT MTF, April 2025): Deutsche Boerse Group subsidiary; no MiFID II/MiFIR exemptions requested; covers bonds, equities, funds, and private-market assets. It hosted the first secondary-market trade of Siemens' EUR 300M digital bond (11 August 2025) and the launch of Kraken's xStocks tokenized equities (9 February 2026).

Germany's eWpG (Electronic Securities Act) generated EUR 615 million in tokenized securities issuance volume in H2 2024, with major issuers including Siemens (EUR 60M + EUR 300M digital bonds), KfW (EUR 100M), and NRW.BANK (EUR 100M, on Polygon, July 2025).

Source: 21X -- Strategic Collaboration with Cashlink; ESMA -- DLT Pilot Regime

3.4 Germany: Clearstream D7 DLT

Clearstream (Deutsche Boerse Group) launched D7 DLT in November 2025 --- a tokenized securities platform built on distributed ledger technology, fully CSDR-compliant, following successful ECB 2024 trials. Google Cloud serves as infrastructure partner. Initial instruments: commercial paper and medium-term notes for international market clients. D7 DLT complements Clearstream's existing D7 digital issuance platform, which surpassed EUR 10 billion in digital securities issuances as of 2024, and has been expanded into

Luxembourg for Eurobond digitization.

Source: Clearstream -- D7 DLT Launch; Deutsche Boerse -- D7 DLT

3.5 France: LISE SA, SG-FORGE, and Banque de France DL3S

France hosts the EU's first live tokenized, CSD-exempt equity exchange:

• LISE SA (Lightning Stock Exchange): Authorized by AMF/ACPR as France's first DLT TSS on 13 October 2025 (EUR 6 billion admitted-securities cap; issuer eligibility capped at EUR 500m market cap, half SMEs <EUR 200m). LISE holds and settles tokens itself under the Pilot Regime's CSD exemption, and launched Europe's first fully on-chain IPO (aerospace manufacturer ST Group, subscriptions opening 9 April 2026).
• SG-FORGE (Societe Generale): Issued its first US tokenized bond (SOFR-linked, on the Canton Network) on 18 November 2025; SG joined Canton as an Ecosystem Super Validator in May 2026.
• Banque de France DL3S: Processed 200+ transactions totaling EUR 1.59 billion in Eurosystem CBDC experiments (May--November 2024), settling the Caisse des Depots digitally native note via wholesale CBDC. Project Pythagore (Banque de France + Euroclear) is tokenizing the ~EUR 310B NEU commercial-paper market, targeting go-live late 2026.

Source: AMF -- LISE Authorization; Banque de France -- Wholesale CBDC Experiments

3.6 Luxembourg and Ireland: Fund-Domicile Infrastructure

Luxembourg is the EU's fund-tokenization leader. Its four Blockchain Laws (2019--2024) provide a statutory basis for tokenized fund units (Blockchain Law IV introduced the Control Agent role as a flexible alternative to the Central Account Keeper, with Investre authorized as the first Control Agent in July 2025). Key infrastructure: Clearstream D7, FundsDLT, the Luxembourg Stock Exchange (LuxSE), and the EIB digital bond program. The DLT Pilot Regime was implemented via Blockchain Law III; atomic settlement is not separately codified, though EIB/Clearstream digital bonds have demonstrated sharply reduced settlement times.

Ireland is a fund-domicile-led jurisdiction with no bespoke domestic blockchain statute, relying on directly-applicable EU law (MiFID II, DLT Pilot, MiCAR) plus CBI guidance. No live CBI-authorised DLT Pilot infrastructure exists as of June 2026; instead, Irish-domiciled money-market funds underlie external tokenization platforms (e.g. JP Morgan Kinexys, Archax), and there is no domestic equities CSD post-Euronext Dublin migration. The CBI's Discussion Paper 12 (5 March 2026) sets out four funds-focused use cases, two of which (cases 3--4) envisage atomic DvP settlement of tokenised ETFs against wholesale CBDC.

Source: CSSF -- Blockchain Laws; Central Bank of Ireland -- Discussion Paper 12 on DLT and Tokenisation

3.7 UK DSS Participants

The

UK Digital Securities Sandbox has 16 Gate 1 entrants representing a cross-section of major incumbent institutions and fintech operators:

BPX Markets submitted its Gate 2 application in early 2026, with Investec joining as its first marketplace member, marking the beginning of institutional participation in live digital securities operations. LSEG's Digital Markets Infrastructure (DMI) platform launched 15 September 2025, and Archax operates as an FCA-regulated MTF. The Bank of England's Project Meridian explored atomic transactions between central bank money and tokenised securities, with a live synchronisation service targeted by 2028.

Source: Bank of England -- DSS Dashboard

3.8 Singapore: ADDX, DBS Digital Exchange, and Marketnode

ADDX (formerly iSTOX) graduated from the MAS Fintech Regulatory Sandbox in early 2020 and holds full RMO and CMS licenses. It surpassed US$2 billion in total transaction volume. Minimum investment threshold lowered to S$5,000 from traditional private-market minimums. Issuers include Partners Group, Investcorp, and Hamilton Lane. DBS Digital Exchange (DDEx) operates as an Approved Exchange / division of DBS Bank for secondary trading of digital assets under DBS's full banking and CMS licenses. InvestaX holds a CMS licence plus RMO approval, and Marketnode (SGX-Temasek JV) provides infrastructure. The BLOOM initiative (launched October 2025) develops a settlement-asset layer enabling cross-border real-time exchange with finality; a live trial of tokenized MAS bills settled via CBDC ran in November 2025.

Source: MAS -- Capital Markets Services Licence

3.9 Japan: BOOSTRY, ibet for Fin, and Osaka Digital Exchange

BOOSTRY/ibet for Fin (Nomura/NRI joint venture): Operates Japan's leading consortium-type blockchain platform for security tokens. Japan Exchange Group (JPX) invested in BOOSTRY in 2023. Osaka Digital Exchange (ODX) START Market is the secondary market for security tokens (8 tokens / JPY 33.6 billion combined market cap as of 31 March 2026). Securitize Japan operates tokenization infrastructure for Japanese issuers. STO trading requires a Type I FIBO with PTS registration operating through JSTOA-approved infrastructure. Japan's cumulative public STO issuance reached JPY 333.3 billion by FY2025, predominantly real estate trust beneficiary certificates (~85%).

Source: Nomura Holdings / BOOSTRY -- Japan ST Market Report FY2025

3.10 Hong Kong: Licensed VATPs

Hong Kong has 13 SFC-licensed VATPs as of early 2026 (OSL, HashKey, HKVAX, HKbitEX, Accumulus, DFX Labs, EX.IO, PantherTrade, YAX, Bullish, BGE, VDX, Bixin). The SFC's 20 April 2026 circular permits 24/7 secondary trading of tokenised SFC-authorised investment products on VATPs (initial focus tokenised MMFs), with regulated stablecoins and tokenised deposits flagged as settlement media. As of March 2026, the AUM of tokenised product classes had risen roughly seven-fold to ~US$10.7 billion over the prior year. The ASPIRe roadmap (February 2025) sets 12 initiatives for expanding the regulated virtual-asset ecosystem.

Source: SFC -- ASPIRe Roadmap

3.11 US: tZERO, Securitize Markets, INX, and Nasdaq

Securitize Markets: SEC-registered broker-dealer, ATS, and transfer agent. Platform for BlackRock BUIDL ($2.5B+ AUM), Hamilton Lane, KKR. Over $3.8 billion in total value of tokenized securities issued. Planning fully on-chain trading for real public stocks in early 2026.

tZERO Securities: SEC-registered broker-dealer, ATS, SPBD. Over $60 billion in trading volume in 2025 (tZERO-reported). Received FINRA approval in December 2025 for retail access to tokenized mutual funds. Planning a US IPO in 2026 with ICE (NYSE owner) as investor.

INX: First SEC-registered security token IPO. Trading platform for security tokens and crypto.

Nasdaq: The SEC approved Nasdaq's tokenized-securities trading rule (Release 34-105047) on 18 March 2026, with go-live targeted Q3 2026. Tokenized trades will settle T+1 conventionally through existing NSCC/DTC rails --- not atomically.

Source: Securitize -- Fully Onchain Trading (CoinDesk, 17 December 2025); tZERO

3.12 Abu Dhabi (ADGM): Realize T-BILLS Fund and the DSF

Abu Dhabi's ADGM regulates Digital Securities under the FSMR via an s. 58(2)(b) deeming power. Digital Securities trade on a Recognised Investment Exchange (RIE, primary and secondary) or an MTF (generally secondary; primary only for Exempt-Offer to non-retail); OTFs are not permitted. Crucially, custody and settlement must sit in a separately licensed legal entity --- a Dedicated Settlement Facility (DSF) holding an FSP for Providing Custody, or a Recognised Clearing House (RCH) --- so a trading venue cannot self-settle within the same legal entity. The DSF supports atomic/instantaneous DvP (for which FSRA may deem certain default-management requirements inapplicable). The flagship venue example is the Realize T-BILLS Fund (OEIC, $RBILL on Ethereum and IOTA), the first tokenized fund domiciled in/approved by FSRA (31 October 2024, manager Neovision Wealth Management). ADGM's RegLab (2016) was the first MENA FinTech sandbox, and its 2023 DLT Foundations regime was the world's first dedicated DLT Foundations/DAO framework.

Source: ADGM FSRA -- Digital Securities Guidance

3.13 Offshore Fund Domiciles: Cayman Islands and British Virgin Islands

Cayman Islands and British Virgin Islands are issuer/SPV/fund-domicile layers rather than DLT market-infrastructure venues. Neither operates a recognised securities exchange for tokenized RWA secondary trading, an EU-style DLT Pilot Regime, or an on-chain settlement statute (atomic DvP and settlement-finality are reported as NO DATA FOUND for both).

• Cayman Islands: The 2026 tokenised-funds framework (in force 24 March 2026) channels tokenized fund interests into the existing Mutual Funds / Private Funds / SIBA regimes (excluded from the VASP regime); nine tokenised investment funds were conditionally registered with CIMA by 29 April 2026. Tokenised fund interests transfer via operator-approved transfers reconciled to book-entry registers; the VASP virtual asset trading platform licence is the closest (AML/prudential) market analogue.
• British Virgin Islands: Trading is via VASP virtual-asset-exchange registration (US$10,000 application / US$25,000 initial), with SIBA rules applying where the token is an investment; settlement runs on the underlying blockchain under general BVI contract/property law. 14 VASPs were registered as at 30 July 2025.

Source: CIMA -- Tokenised Funds Framework; BVI FSC -- VASP Registration Guidance

4. Comparative Analysis Table

All 21 jurisdictions, mirroring the source matrix's t4 dimension (DLT venue regime, pilot regime, atomic settlement, notable venues).

5. Interoperability

5.1 DLT-to-Traditional Market Infrastructure

The interoperability challenge --- connecting DLT-based trading and settlement systems with existing market infrastructure --- is the single largest barrier to scaling tokenized securities markets, and was flagged by ESMA as a primary cause of low DLT Pilot uptake.

SDX--SIX Bridge (Switzerland): The most advanced operational example. Since October 2022, SDX has maintained a "digital bridge" enabling bonds to move between SDX and traditional SIX systems. Despite this technical achievement, secondary market activity remains concentrated in traditional infrastructure, demonstrating that technological interoperability alone does not drive liquidity migration.

Clearstream D7 DLT (EU ---

Germany /

Luxembourg): Complements Clearstream's existing D7 digital issuance platform, designed for seamless integration with existing Clearstream/Eurobond infrastructure across Germany and Luxembourg, enabling issuers to choose between digital and tokenized issuance paths.

DTC Tokenization Pilot (

US): The SEC's no-action letter to DTC (December 2025) enables tokenization of DTC-custodied assets --- Russell 1000 constituents, US Treasuries, and major index ETFs --- on approved blockchains, with registered wallets screened for OFAC compliance. The now SEC-approved Nasdaq rule (18 March 2026) integrates tokenized settlement into the existing national market system, settling T+1 through NSCC/DTC.

ADGM DSF / RCH model (Abu Dhabi): Mandatory legal-entity separation of trading from custody/settlement (a DSF or RCH must settle), with independent third-party reconciliation at least annually --- a structurally different interoperability posture from the integrated DLT TSS.

Offshore fund domiciles (

Cayman Islands, BVI,

Ireland,

Luxembourg): Rather than operating their own market infrastructure, these jurisdictions plug fund vehicles into onshore platforms --- Irish and Luxembourg MMFs/ETFs underlie tokenization platforms such as JP Morgan Kinexys and Archax, while Cayman/BVI provide the SPV/issuer layer.

Source: DTCC -- Paving the Way to Tokenized DTC-Custodied Assets (11 December 2025); Katten -- Evaluating Nasdaq Tokenization Rule's Potential Impact

5.2 Cross-Chain Interoperability for Tokenized Securities

Cross-chain interoperability --- enabling tokenized securities on different DLT platforms to interact --- remains largely at the proof-of-concept stage. Key considerations for regulators:

• Settlement finality risk: Cross-chain bridges introduce additional points of failure between the moment a transfer is initiated and when it achieves finality on the destination chain.
• Regulatory jurisdiction: A tokenized security moving between chains may cross jurisdictional boundaries, raising questions about applicable law and competent authority --- acute for the offshore fund-domicile model where issuance, custody, and trading sit in different jurisdictions.
• Identity and compliance: KYC/AML obligations must be maintained across chains, requiring interoperable identity verification.

5.3 ECB Experiments: Pontes and Appia

The European Central Bank's wholesale DLT settlement initiatives represent the most significant public-sector effort to bridge DLT and traditional infrastructure across the EU/EEA jurisdictions (

EU,

France,

Germany,

Luxembourg,

Ireland).

Background: Between May and November 2024, the Eurosystem conducted exploratory work with 64 participants, executing 50+ trials settling nearly EUR 1.6 billion in central bank money. Three interoperability solutions were tested: DL3S (

Banque de France, full-DLT), TIPS Hash-Link (API-based), and the Trigger Solution (

Bundesbank T2 bridge).

Pontes (near-term, end Q3 2026 launch): Links market DLT platforms with the Eurosystem's TARGET Services for settlement in central bank money, including wholesale CBDC functionality.

Appia (long-term, blueprint due H2 2028): Ground-up effort to design an integrated wholesale financial ecosystem built on DLT. The ECB published a consultation paper for Appia in March 2026, describing it as "a highway for the future of Europe's digital finance."

Source: ECB -- Exploratory Work on New Technologies for Wholesale CeBM Settlement; ECB -- Eurosystem Expands DLT Initiative (20 February 2025); ECB Blog -- A Highway for the Future of Europe's Digital Finance (12 March 2026)

5.4 BIS Project Agora

Project Agora is the BIS Innovation Hub's flagship cross-border payments tokenization project, bringing together seven central banks (Eurosystem,

Japan,

Korea, Mexico,

Switzerland,

UK,

US) and 43 regulated financial institutions.

The project explores how tokenized central bank money and commercial bank money can improve cross-border payments through composable smart contracts. The prototype building and testing phase is expected to conclude in H1 2026, with a report on lessons learned to follow.

Project Agora addresses the foundational requirement for any cross-border tokenized securities settlement system: a mechanism for settling the payment leg in trusted, regulated money across jurisdictions.

Source: BIS -- Project Agora; BIS -- Project Agora FAQ

5.5 Other Cross-Border and Domestic Settlement Initiatives

6. What Works and What Does Not

What Works

1. Institutional-led issuance with regulatory clarity. Jurisdictions where traditional financial institutions drive tokenization activity show the strongest results.

   Switzerland (SDX, with UBS, World Bank, cantonal issuers),
   Japan (Nomura, SBI, MUFG-led market reaching JPY 333.3B), and the
   US (BlackRock BUIDL at $2.5B+) demonstrate that institutional credibility combined with clear regulatory pathways generates meaningful issuance volume.

2. Atomic settlement and DvP. DLT-based atomic delivery-versus-payment eliminates settlement risk and has proven technically reliable in live or pilot environments ---

   Switzerland (SDX, Helvetia III, production-grade),
   France (Banque de France DL3S),
   Germany (Bundesbank Trigger Solution),
   Singapore (BLOOM),
   Canada (Project Samara),
   Australia (Project Acacia), and Abu Dhabi (ADGM DSF). The BIS reports tighter bid-ask spreads (17 bps vs. 30 bps) for tokenized bonds compared to conventional instruments.

3. Existing license frameworks with DLT permissions (Model C).

   Singapore's RMO approach, the
   US ATS model (now joined by SEC-approved Nasdaq exchange trading), and
   Canada's marketplace/CTP registration have produced more operational platforms and higher transaction volumes than purpose-built DLT licensing regimes. Adding DLT capability to existing licenses reduces regulatory friction compared to creating new license categories.

4. Central bank engagement. The ECB's Pontes/Appia, SNB's Helvetia III, HKMA's Ensemble, the Bank of Canada's Samara settlement, the RBA's Acacia, the Bank of England's Meridian, and MAS's Guardian/BLOOM demonstrate that central bank participation is a prerequisite for institutional confidence in DLT settlement.

5. Government issuance as market catalyst.

   Hong Kong's digital green bond program (HKD 16.8B across three issuances), Swiss cantonal bond issuances on SDX, and Germany's KfW/NRW.BANK digital bonds provide benchmark instruments that validate the regulatory and technical framework.

What Does Not Work

1. Overly restrictive thresholds and temporary regimes. The EU DLT Pilot Regime's EUR 6 billion aggregate cap and temporary duration produced only three authorizations in over two years (the register has since grown to six). ESMA's own review acknowledged that the thresholds discouraged participation. The proposed ~17x increase to EUR 100 billion and shift to permanence is a direct response to this failure.

2. New license categories without clear advantages. Creating novel license types (DLT TSS, DLT MTF) that require navigating both existing authorization (MiFID II, CSDR) and additional DLT-specific permissions increases complexity without proportionate benefit. 21X AG's authorization required 18 months involving four regulators (BaFin, Bundesbank, ESMA, ECB).

3. Secondary market liquidity. Across all jurisdictions, primary issuance of tokenized securities has proven achievable, but secondary market liquidity remains stubbornly concentrated in traditional infrastructure. SDX's own data confirms this. No jurisdiction has yet demonstrated meaningful migration of secondary trading to DLT venues.

4. Fragmented multi-zone / offshore regimes. The

   UAE's parallel regulatory systems (VARA, ADGM FSRA, DIFC DFSA, plus federal CMA) create complexity for participants operating across zones, despite each individual regime being well-designed; and offshore fund domiciles (
   Cayman Islands, BVI) deliberately provide no market infrastructure at all, leaving trading and settlement to be sourced onshore --- a deliberate division of labour, but one that fragments the value chain.

5. Sandbox without graduation pathway. Sandboxes that lack a clear, time-bound pathway to permanent authorization risk becoming permanent holding patterns. The

   UK DSS addresses this with its four-gate structure, though no firm had reached Gate 2 after over a year of operation.
   South Korea's shift from FSC sandbox designations to an enacted FSCMA/AERSB framework (effective January 2027) is the model for graduation.

7. Recommended Framework

For regulators designing a DLT market infrastructure regime, the following framework synthesizes lessons from the most effective jurisdictions.

7.1 Regulatory Architecture

Principle 1: Technology-neutral authorization, DLT-specific operational requirements. Do not create a separate license category for DLT venues. Instead, authorize DLT market infrastructures under existing trading venue and CSD license categories, with supplementary DLT-specific operational requirements (smart contract audit, key management, network resilience). This is the approach that has produced the highest volumes (

Singapore,

US,

Japan) and underpins Abu Dhabi's deeming-based Digital Securities regime.

Principle 2: Permit integrated trading and settlement --- or mandate clean separation, deliberately. DLT enables atomic delivery-versus-payment that can eliminate the need for separate trading and post-trade entities. The EU DLT TSS category and

France's LISE permit a single authorized entity to provide integrated trading, clearing, and settlement. By contrast, Abu Dhabi mandates legal-entity separation (a DSF or RCH must settle). Regulators should choose consciously: integration reduces overhead; separation preserves conflict-of-interest firewalls.

Principle 3: No artificial thresholds on DLT instruments. Per-instrument and aggregate thresholds specific to DLT (as in the original EU DLT Pilot Regime) create a self-fulfilling prophecy of low adoption. Apply the same thresholds as for traditional instruments. If risk concerns warrant limits, impose them on individual operators, not on the technology.

Principle 4: Permanent authorization from inception. Temporary regimes and sandboxes deter long-term capital investment. If the regulatory framework is sufficiently robust, authorization should be permanent --- as in

Switzerland's statutory DLT trading facility. The EU's shift from a three-year pilot to permanent authorization validates this principle.

7.2 Settlement and Central Bank Money

Principle 5: Establish a DLT settlement pathway in central bank money. The ECB's Pontes, SNB's Helvetia III, HKMA's Ensemble, the Bank of Canada's Samara, the RBA's Acacia, and the Bank of England's Meridian demonstrate that settlement in central bank money is achievable and essential for institutional confidence. Regulators should coordinate with central banks to establish at minimum a pilot pathway for DLT settlement in wholesale CBDC or central bank reserves.

Principle 6: Define settlement finality for DLT. Existing settlement finality laws (EU Settlement Finality Directive, UK Settlement Finality Regulations) were not designed for distributed ledger systems. Regulators must specify: (a) when a transfer order enters the system, (b) when it becomes irrevocable, and (c) when settlement is final on a DLT. The EU's proposed conversion of the Settlement Finality Directive to a technology-neutral Regulation provides a model;

South Korea's amended AERSB (transfer effective on debit/credit in the electronic register) is a statutory analogue.

7.3 Interoperability

Principle 7: Mandate interoperability with traditional infrastructure. DLT venues that cannot interoperate with existing CSDs, exchanges, and payment systems will not achieve critical mass. Require DLT market infrastructure operators to maintain connectivity with at least one traditional CSD or payment system.

Switzerland's operational SDX--SIX bridge is the benchmark.

Principle 8: Support cross-border recognition. Tokenized securities will flow across borders --- especially under the offshore fund-domicile model where issuance (

Cayman, BVI,

Ireland,

Luxembourg) and trading happen in different jurisdictions. Regulators should participate in multilateral initiatives (BIS Project Agora, IOSCO recommendations) and establish bilateral equivalence or recognition frameworks for DLT market infrastructure authorized in peer jurisdictions.

7.4 Investor Protection

Principle 9: Apply existing investor protection standards. Securities classification, prospectus requirements, suitability assessments, and market abuse rules should apply to tokenized securities identically as to their traditional counterparts. The tokenization layer does not change the risk profile of the underlying instrument.

Principle 10: Address DLT-specific operational risks. Require DLT market infrastructure operators to have: written smart contract audit policies, key management and recovery procedures, network fork and chain reorganization contingency plans, and cyber resilience testing incorporating DLT-specific attack vectors.

8. Decision Matrix

The following matrix assists regulators in selecting the appropriate DLT market infrastructure model based on jurisdiction-specific factors.

Decision Flowchart

1. Does your jurisdiction have a robust existing licensing framework for trading venues and CSDs?

   • Yes: Proceed to Model C or Model E
   • No: Proceed to step 2

2. Is there political will and institutional capacity to design a dedicated DLT framework?

   • Yes: Proceed to Model A
   • No: Proceed to step 3

3. Does the jurisdiction operate free zones, special economic zones, or an offshore fund-domicile industry with independent regulators?

   • Yes: Consider Model D
   • No: Implement Model B (sandbox) as a transitional measure, with a defined pathway to Model A or Model C within 3--5 years

4. Regardless of model chosen: Coordinate with the central bank on DLT settlement in central bank money. Participate in multilateral DLT interoperability initiatives. Apply existing securities regulation to tokenized instruments without modification.

Verification Notes

This guidance mirrors the canonical per-jurisdiction t4 facts (DLT venue regime, pilot regime, atomic settlement, notable venues) in .claude/rwa-regulation-fact-matrix.json for all 21 jurisdictions. No fact has been introduced beyond the matrix or the prior verified version of this file. Aggregates ("X of N") are derived from the matrix for N = 21. Where the matrix records NOT VERIFIED or NO DATA FOUND, that status is reflected honestly rather than filled in.

Corrections Applied in This Refresh

1. US Nasdaq tokenized securities --- SEC-APPROVED (not merely filed). The matrix records SEC approval of Nasdaq's tokenized-securities trading rule on 18 March 2026 (Release 34-105047), with go-live targeted Q3 2026; trades settle T+1 conventionally (not atomically). The prior file described only a "proposed rule change."

2. EU DLT Pilot operator count --- six (not three). ESMA's January 2026 register lists six authorized DLT market infrastructures: CSD Prague, 21X, 360X, Axiology (Lithuania), LISE (France), and Securitize (Spain/CNMV).

3. Australia DAF Act 2026 --- ENACTED. The Corporations Amendment (Digital Assets Framework) Act 2026 (No. 38 of 2026) received Royal Assent 8 April 2026 but commences 9 April 2027 (DAP/TCP categories); Project Acacia's final report issued 18 May 2026.

4. Brazil MP 1303 --- REJECTED. The Chamber of Deputies rejected Provisional Measure 1,303/2025 on 8 October 2025; the flat crypto tax / exemption removal did not take effect. Brazil's atomic settlement for tokenized RWAs remains NOT VERIFIED (Drex Phase 1 uses a centralized settlement model).

5. Japan cumulative STO issuance restated to JPY 333.3 billion by FY2025 (BOOSTRY FY2025 report, ~double the prior year), replacing the FY2024 JPY 168.2 billion figure.

6. Four new jurisdictions integrated --- Cayman Islands, British Virgin Islands, Ireland, and Abu Dhabi (ADGM) --- across every model bucket, the EU deep dive, the worldwide venues section, the comparative table, interoperability, what-works/does-not, the recommended framework, and the decision matrix.

Items Marked as Unverified or Approximate (per the matrix)

• 360X AG and Axiology DLT technology: Not confirmed in the matrix; marked NOT VERIFIED.
• Japan "native" on-chain security-token pilot (Nomura/SBI/Daiwa/MUFG) and Japan/South Korea/Bahrain atomic settlement: NOT VERIFIED in the matrix.
• Cayman Islands and British Virgin Islands atomic settlement / settlement finality: NO DATA FOUND in the matrix --- these are issuer/fund-domicile layers without on-chain market infrastructure.
• Ireland live DLT settlement system: NO DATA FOUND; DP12 (5 March 2026) only envisages atomic DvP against wholesale CBDC in two of four use cases.
• BIS tokenized bond spread data (17 bps vs. 30 bps): Sourced from the BIS Annual Economic Report 2025; methodology not independently verified.
• tZERO $60B trading volume: tZERO-reported figure; not independently verified.

Last verified: 4 June 2026