Key facts
- European finance and tokenization groups want the EU to remove or raise a proposed 100 billion euro cap on tokenized financial instruments.
- Signatories include Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute, and Axiology.
- The proposed cap is part of revisions to the EU's Distributed Ledger Technology (DLT) Pilot Regime.
- Existing European projects already reach 350 billion euro in scale, according to the groups.
- The DLT Pilot Regime allows testing of blockchain-based trading and settlement under exemptions from EU financial rules.
A coalition of European financial and tokenization groups has urged EU lawmakers to remove a proposed 100 billion euro cap on tokenized financial instruments or raise it to at least 500 billion euro. The groups argue that the proposed ceiling is insufficient for existing projects and would hinder growth compared to the US market, where a dominant settlement platform can tokenize assets without volume caps, potentially covering up to 150 trillion euro.
The draft letter, addressed to EU Council members and the European Parliament’s Economic and Monetary Affairs Committee, stated that some existing European projects already reach 350 billion euro in scale and plan further expansion. The groups highlighted that the proposed limits apply to the market value of financial instruments admitted to DLT infrastructure, not trading volume, making the 100 billion euro cap relatively small.
The European Commission had proposed increasing the current 6 billion euro limit to as much as 100 billion euro as part of its Market Integration and Supervision Package, which includes revisions to the Distributed Ledger Technology (DLT) Pilot Regime. This regime, effective since 2023, allows financial firms to test blockchain-based trading and settlement of assets like stocks and bonds under exemptions from certain EU financial rules.
This push follows previous industry pressure. In April, 39 financial firms and industry groups, including Nasdaq and Boerse Stuttgart, called for fast-tracking changes to the DLT Pilot Regime and raising its limit to between 100 billion euro and 150 billion euro, also requesting broader asset eligibility and the removal of time limits on licenses. A similar warning came in February from firms like Securitize and Boerse Stuttgart, who cautioned that existing limits were preventing regulated onchain markets from scaling in Europe and could lead liquidity to migrate to US markets.