Central Securities Depository drives innovation in European capital markets with DLT technology.
CSD Prague gets approval for a DLT registry in Europe
The Central Securities Depository (CSD) in Prague has taken a significant step into the world of decentralized finance by receiving approval to operate a settlement system based on Distributed Ledger Technology (DLT). This approval was granted by the Czech National Bank and notified by ESMA, marking an important milestone for innovation in European capital markets.
Starting November 18, 2024, the CSD will offer issuers the registration of securities in a DLT-based registry. This technology not only enables the management of securities accounts, but also facilitates the crediting of stocks or bonds, allowing transactions both with and without cash settlement. The platform represents an opportunity for financial market companies to become DLT nodes, enabling them to open DLT accounts for their customers.
Innovation and legal compliance
DLT registration complies with Czech law, meeting the requirements of the Civil Code and the Commercial Companies Act. Importantly, only proprietary accounts can be opened in DLT registries, allowing holders to exercise the rights associated with the securities. This approach provides greater security and transparency in transactions.
Access and functionality
Users will have access to a web and mobile application that provides 24/7 access to account status, transactions and notifications. This accessibility is a significant benefit to investors and businesses, making it easier for them to manage their investments easily and immediately.
What are the implications for the European market?
The SSC's approval in Prague for a DLT registry could represent a paradigm shift in the way securities are managed and regulated in Europe. With increasing digitization and decentralization, one might wonder: Will other financial institutions follow the example of the SSC in Prague? The answer to this question could define the future of the European capital market and its ability to adapt to new technologies. The road to DLT adoption is mapped out, but it will be interesting to observe how the regulatory and operational landscape evolves in the coming years.
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