European finance groups push to remove EU tokenized securities cap

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EU tokenized securities cap

Highlights

Nasdaq, Boerse Stuttgart Group, Securitize, and others urge EU lawmakers to set the tokenized securities cap at a minimum of 500 billion euro.
The proposed Market Integration and Supervision Package would raise the DLT Pilot Regime cap from 6 billion euro to up to 100 billion euro, but industry groups argue this remains inadequate for market growth.
The coalition warns that restrictive EU limits could shift liquidity to U.S. markets, where tokenization platforms can operate without volume caps, covering up to 150 trillion euro in assets.

Industry campaign targets DLT pilot thresholds

As reported by Cointelegraph, a coalition including Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute and Axiology says the proposed cap would constrain expansion of regulated tokenized markets in Europe. In the draft letter addressed to EU Council members and the European Parliament’s Economic and Monetary Affairs Committee, the groups argue that 500 billion euro should be the minimum threshold if lawmakers keep a cap in place.

The signatories say some existing European projects already reach 350 billion euro in scale and are planning further growth, making a 100 billion euro ceiling too low. They also note that the threshold applies to the market value of financial instruments admitted to DLT infrastructure, not to trading volume, which leaves the proposed limit small relative to global equity markets.

The European Commission is proposing to raise the current 6 billion euro limit to as much as 100 billion euro through its Market Integration and Supervision Package, which includes revisions to the Distributed Ledger Technology Pilot Regime. The DLT Pilot Regime, in force since 2023, lets financial firms test blockchain-based trading and settlement for assets such as stocks and bonds under exemptions from some EU financial rules.

Competitive pressure grows from U.S. markets

The latest letter follows months of lobbying by financial firms and tokenization groups for broader changes to the EU framework. In April, 39 firms and industry bodies, including Nasdaq and Boerse Stuttgart, urged policymakers to accelerate reforms, raise the overall limit to between 100 billion euro and 150 billion euro, widen eligible assets and remove time limits on licenses under the regime.

That campaign followed a similar February warning from companies including Securitize, 21X and Boerse Stuttgart, which said asset limits, volume caps and time-limited licenses were preventing regulated onchain markets from scaling in Europe. The groups warned that liquidity could shift to U.S. markets as regulators there move toward larger-scale tokenization and onchain settlement.

The Sept. 7 letter contrasts the EU proposal with the U.S., where the groups say a dominant settlement platform can tokenize U.S. equities and other assets without volume caps, potentially spanning as much as 150 trillion euro in assets. Separate market data in the report shows distributed real-world assets total about $39.15 billion, excluding stablecoins, with U.S. Treasury debt accounting for roughly $15.8 billion.

Our earlier coverage on ESMA’s scrutiny of prediction markets explained how European regulators are warning that platforms like Polymarket and Kalshi can heighten market-abuse and investor-protection risks, especially for retail users and in cases with limited identity checks. We also noted that these services remain largely unauthorised across much of Europe even as companies push expansion, highlighting a growing policy divergence with the U.S. as it allows more prediction-style products.

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