DLT Pilot Regulation

Definition ∞ DLT Pilot Regulation refers to experimental regulatory frameworks designed to test the application of distributed ledger technology (DLT) in financial markets. These pilot programs allow firms to operate DLT-based systems under specific, often temporary, exemptions from existing rules. The objective is to gather data and assess the risks and benefits of DLT before implementing permanent regulations. This approach supports innovation while maintaining oversight.
Context ∞ Several jurisdictions are actively pursuing DLT Pilot Regulation to better understand and govern digital assets and blockchain applications in traditional finance. The discussion revolves around the scope of these pilots, the types of assets included, and the criteria for success. Such initiatives are seen as crucial steps towards integrating DLT into mainstream financial infrastructure.