Munich

The Munich DARTE session took place on September 11th, 2025, at V-Bank in collaboration with the European Commission, Project Catalyst, FinPlanet, Bybit, and the TUM Blockchain Conference. This expert roundtable convened legal scholars, market operators, financial institutions, and technology providers to examine regulatory gaps and practical barriers in the secondary market for tokenized securities and the broader digital capital markets framework.

The session featured three focused discussions: Christopher Görz (Bundesverband elektronische Wertpapiere) examined liquidity and operational hurdles for hybrid shareholdings and proposed share loan and trustee-based solutions; Roland Gollenbeck (Bybit) highlighted the enforcement asymmetries of token rights across EU Member States due to divergent civil laws; and Carola Rathke (YPOG) explored how the DLT Pilot Regime’s current limitations could be overcome by aligning technical innovation with a pan-European strategy for digital asset standardization.

The Munich edition furthered DARTE’s commitment to bridging regulatory fragmentation by surfacing structural obstacles to market integration, investor protection, and technological adoption across the EU’s evolving digital finance landscape.

Secondary Markets in Case of Hybrid Shareholdings

Hybrid securities that exist both as traditionally certificated shares and blockchain-based electronic securities (Kryptowertpapiere) face serious secondary market liquidity challenges. While legal conversion between the two forms is permitted, technical and operational pathways remain underdeveloped. Participants explored market-based solutions, including market-maker models, trustee-held share pools, and intermediary banks facilitating conversion. The most viable pathway involved banks using share loan arrangements to manage settlement while maintaining liquidity. These challenges are not regulatory in nature but stem from fragmented infrastructure and market design inefficiencies.

Call to Actions

Pilot and scale intermediary-based conversion mechanisms, such as share-loan structures, to bridge liquidity gaps between classical and tokenized shares.
Explore legal exemptions or regulatory clarifications at the EU level to enable share loan arrangements for hybrid securities without triggering additional licensing obligations.

Security Token Rights Not Equally Executable EU-Wide

While MiFID II and MiFIR harmonize regulatory classifications of financial instruments, the underlying rights attached to security tokens, like dividends, governance, and redemption, are governed by national civil, corporate, and property laws. These disparities result in legal uncertainty and uneven enforceability across the EU, especially for cross-border investors. The group agreed that existing frameworks cannot resolve this disconnect, making this the first DARTE topic where the only feasible solution would be the creation of a new EU-level law.

Call to Actions

Support the development of an “EU Electronic Securities Law” that harmonizes civil law definitions and enforcement mechanisms for ledger-based financial instruments across the Union.
In the interim, identify two or more concrete use cases and submit them to competent authorities to clarify enforceability pathways under existing national frameworks.

DLT Pilot Regime: Potential Still Unlocked

Despite its ambition to modernize EU capital markets, the DLT Pilot Regime remains underutilized due to restrictive thresholds, limited eligible assets, and a lack of interoperability standards. These constraints prevent the emergence of a truly integrated digital market. Participants emphasized the need to expand the regime’s scope in line with ESMA’s recommendations and to foster technical and legal standards that enable cross-chain communication and settlement integration. Without such developments, the potential of the regime, and the broader promise of blockchain in financial infrastructure, risks remaining untapped.

Call to Action

Advance the recommendations from ESMA’s review of the DLT Pilot Regime, including expanding eligible asset classes, raising thresholds, and removing sunset clauses.
Launch a cross-sector working group to develop common legal and technical standards for DLT interoperability, creating the foundation for a unified European digital securities market.