EU Capital Markets Shift Targeted by Axiology: First Blockchain License Granted in the Baltic-Nordic Region
In a groundbreaking development for the European Union (EU) capital markets, particularly in Northern and Eastern Europe, Lithuanian fintech firm Axiology has been granted a Distributed Ledger Technology (DLT) License by the Bank of Lithuania, in coordination with the European Central Bank (ECB) and the European Securities and Markets Authority (ESMA). This marks only the second such authorization in the EU and the first in Northern and Eastern Europe.
The license allows Axiology to operate a fully integrated trading and settlement system based on DLT, revolutionizing the digital issuance, trading, and settlement of financial instruments on-chain. This shift towards blockchain-enabled capital markets promises improved efficiency and security compared to traditional systems.
The regulatory access and compliance aspect of the license are equally significant. By being authorized under the EU’s DLT Pilot Regime, Axiology now has legal access to operate within the EU regulatory framework. This license sets a regulatory precedent that can stimulate further innovation and adoption of blockchain technology in regulated finance.
Axiology's infrastructure leverages a permissioned version of the XRP Ledger (XRPL), a globally recognized blockchain protocol known for secure, high-throughput financial transactions. The combination of technical maturity and regulatory adaptability aligns well with EU standards, supporting scalable market infrastructure development.
The license also enables Axiology to operate a tokenised assets trading venue with embedded settlement, custody, and notary functions using regulated e-money tokens (EMTs). This innovative approach enables secure, near-instant settlement of trades on-chain via delivery-versus-payment (DvP), reducing counterparty and operational risks prevalent in traditional settlement processes.
The implications for the Northern and Eastern European fintech landscape are profound. This initiative positions Lithuania and the broader region as pioneering hubs for blockchain-based capital market infrastructure within the EU. It could accelerate fintech innovation, attract investment, and encourage other regulatory bodies in the region to adopt similar frameworks, fostering a competitive fintech environment with enhanced transparency and efficiency.
Axiology's core focus is on collaborating with asset originators, broker-dealers, crowdfunding platform operators, and neo-brokers, particularly those serving Small and Medium Enterprises (SMEs) and retail investors. The company is also in discussions with Lithuania's Ministry of Finance on potential issuance of digital government bonds, including low-denomination instruments aimed at retail investors.
Jochen Metzger, Board Member of Axiology, stated, "Europe's capital markets should not remain a patchwork of legacy systems and fragmented structures. The next phase of financial innovation will be driven by infrastructure and ambition to build digital-first, inclusive, and efficient markets."
Axiology's technology has already been tested with national central banks, including the National Bank of Georgia and Banco de la República (Colombia). The company also participated in the ECB's digital euro trials, piloting digital euro-based government bond issuance and settlement scenarios utilizing Bundesbank's trigger solution.
Operations for Axiology are set to commence in autumn 2025, with phased expansion across the European Economic Area. The June 2025 ESMA assessment underlined the success of the EU's DLT Pilot Regime in catalyzing innovation in SME financing and post-trade automation. Axiology's groundbreaking DLT License Baltic is a critical step in modernizing capital market infrastructure and boosting the region's fintech prominence.
- The license granted to Lithuanian fintech firm Axiology by the Bank of Lithuania allows them to operate a trading and settlement system based on DLT, which is significant for the European Union (EU), particularly in Northern and Eastern Europe.
- By being authorized under the EU’s DLT Pilot Regime, Axiology now has legal access to operate within the EU regulatory framework, setting a regulatory precedent for further innovation and adoption of blockchain technology in regulated finance.
- Axiology's infrastructure, leveraging a permissioned version of the XRP Ledger, aligns well with EU standards, supporting scalable market infrastructure development in the fintech industry.
- The license enables Axiology to operate a tokenized assets trading venue with embedded settlement, custody, and notary functions using regulated e-money tokens (EMTs), potentially reducing risks prevalent in traditional settlement processes and fostering a competitive fintech environment.
