Definition ∞ Regulatory compliant DLT refers to distributed ledger technology solutions specifically designed and implemented to adhere to relevant legal and regulatory frameworks. This involves incorporating features for data privacy, anti-money laundering, know-your-customer, and financial reporting requirements. Such compliance ensures that blockchain applications can operate within established legal boundaries. It is crucial for institutional adoption.
Context ∞ The development of regulatory compliant DLT is a critical step for integrating blockchain into mainstream finance, particularly for tokenized securities and wholesale payments. Financial authorities are actively engaging with industry participants to define the necessary technical and operational standards. This collaboration aims to foster innovation while maintaining market integrity and investor protection.