- The European Securities and Markets Authority (ESMA) now requires the use of the globally recognised Digital Token Identifier (DTI) for the standardised identification of crypto-assets
- The DTI will be a core reference point used by crypto-asset service providers (CASPs) for pre- and post-trade transparency, order book management and record-keeping purposes.
- ESMA among one of the first jurisdictions to embed the new DTI standard into regulatory requirements, with other authorities facing similar challenges.
Digital Token Identifier (DTI) Foundation, a not-for-profit division of Etrading Software (ETS), the global regulatory data provider, today welcomes new regulations to promote digital asset transparency by requiring the use of the globally recognised ISO DTI for the standardised identification of crypto-assets within the European Union.
The landmark decision by the European Securities and Markets Authority (ESMA) means the DTI will become the core reference point for crypto asset service providers (CASPs) across EU capital markets.
Its adoption by EU members will help to ensure consistency and transparency across domestic and international markets, fulfilling the same function provided by currency codes for traditional fiat currencies.
The DTI will be used for pre- and post-trade transparency, order book management and record-keeping by CASPs. Issuers and offerors of asset-referenced or e-money tokens, commonly known as stablecoins, will also be required to provide DTIs within crypto-asset white papers.
As well as enabling the unique identification of a token and its ledger, the DTI acts as a record of the price and quantity for orders and transactions whenever crypto-assets are exchanged. It will address a critical need for standardised identification data which blends digital standards with conventional financial systems.
EMSA proposed use of the ISO 24165 DTI standard for crypto asset identifiers in October 2023 under the EU’s Markets in Crypto-Assets (MiCA) Regulation, to support market integrity and protect investors. Following an industry consultation period, the final technical standards report published on Thursday confirm the use of DTIs under MiCA.
ESMA highlighted in its final report that DTI is “the only standard as defined at the Union level which is unique, neutral, reliable, open source, scalable, accessible, available at a reasonable cost, and subject to an appropriate governance framework.” DTI Foundation is committed to operating the registry on cost recovery principles, launching an industry wide consultation in June 2024.
While ESMA is one of the first jurisdictions to embed ISO 24165 DTIs into regulatory requirements, standard-setting bodies in other geographies face similar challenges which may spark interest from other regulatory authorities in adopting the standard.
The DTI has already been adopted by a number of key market infrastructure, including Swift and Six Digital Exchange. Wider uptake is expected following Thursday’s announcement.
Sassan Danesh, CEO of Etrading Software, comments “ESMA’s decision to mandate the DTI for crypto asset identification is a crucial step towards greater standardisation and transparency for crypto-assets in the EU.
“We look forward to working with other jurisdictions to bring the benefits of the DTI standard to the broader global community.”
Rudolf Siebel, Managing Director of BVI German Fund Association and DTI Product Advisory Committee member said, “We commend the proactive approach by ESMA as the buy-side needs and supports standardised, open and global ISO identifiers. The DTI provides this critical element across both the TradFi and DeFi space.”
