Digital Bonds in Europe: Regulatory Landscape, Market Evidence and Economic Policy Options

Abstract

Purpose | We document how tokenised bonds have progressed from pilots to routine issuance in the EU, mapping the DLT Pilot Regime and three enabling Member State regimes (Germany’s eWpG, Luxembourg’s dematerialised-securities law, Italy’s Fintech Decree) and linking law to market practice. Research method | Documentary analysis of primary EU/national legal acts, supervisory reports and verifiable issuer communications; triangulation with transaction evidence from leading SSA and corporate deals. Results | We find operational gains in distribution and lifecycle processing and credible pathways to delivery-versus-payment in central bank money (Eurosystem 2024 designs). Adoption, however, remains concentrated in SSAs and development banks, as well as large investment-grade corporates; SMEs see limited benefit where settlement stays in commercial bank money and interfaces are bespoke. Originality / value / implications / recommendations | We synthesise law-market-technology interactions into an incremental policy agenda: (i) codify a technologically neutral gateway for DvP in central bank money; (ii) standardise token/event disclosures (ICMA Bond Data Taxonomy).