European financial and tokenization stakeholders have escalated their push for changes to the EU’s Distributed Ledger Technology (DLT) Pilot Regime, warning that a proposed cap of 100 billion euros could choke off scaling. In a letter dated Sept. 7 and addressed to members of the European Council and the European Parliament’s Economic and Monetary Affairs Committee, a coalition urged lawmakers to remove the limit entirely or, if it remains, raise it to at least 500 billion euros.
The group argues that some existing European tokenization efforts have already reached a scale of about 350 billion euros and are planning further expansion. They also claim the EU’s proposed cap is mismatched to how global markets size up, noting that the threshold would be based on the market value of instruments admitted to DLT infrastructure rather than trading volumes.
Key takeaways
- A coalition of European financial and tokenization firms wants EU lawmakers to remove the proposed 100 billion euro cap on tokenized financial instruments or raise it to at least 500 billion euros.
- The letter, dated Sept. 7, is directed to EU Council members and the European Parliament’s Economic and Monetary Affairs Committee.
- Signatories include Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute and Axiology.
- The DLT Pilot Regime’s thresholds are described as based on admitted market value, making the EU cap small relative to global equity markets.
- Backers point to the US as an example of tokenization without volume-style limits, arguing Europe risks falling behind.
Why the 100 billion euro cap is drawing fire
The coalition’s central concern is the scale implied by the EU’s draft proposal. The letter states that lawmakers should treat 500 billion euros as a baseline if they decide to keep any cap on tokenized financial instruments.
In their view, the proposed 100 billion euro ceiling would be too low for Europe’s tokenization trajectory. They cite that certain regional projects already approach 350 billion euros in scale and plan additional growth, suggesting that a tighter cap would effectively force regulatory bottlenecks before the market has a chance to expand.
The industry letter also frames the limitation as structurally restrictive because of how it is measured. According to the signatories, the thresholds apply to the market value of financial instruments admitted to DLT infrastructure—rather than the volume of trading activity. That distinction, they argue, makes the proposed 100 billion euro number relatively small when compared with the size of global equity markets.
What the EU is proposing under its Market Integration package
The debate is linked to the European Commission’s Market Integration and Supervision Package. As described in the source, the Commission has proposed increasing the current cap—set at 6 billion euros—to as much as 100 billion euros, as part of revisions to the DLT Pilot Regime.
The DLT Pilot Regime, which took effect in 2023, allows eligible financial firms to test blockchain-based trading and settlement of assets such as stocks and bonds. It does so through exemptions from certain EU financial rules, enabling experimentation without fully stripping away regulatory guardrails.
For participants in the ecosystem, however, the issue is not whether the program should exist—it is whether the limits imposed on tokenized instruments are calibrated to real-world growth. The coalition’s letter argues that the proposed tighter ceiling would limit the ability of regulated on-chain markets to scale within Europe.
US comparison: “no volume caps” for tokenized equities
A major part of the coalition’s argument is comparative. In the letter, signatories contrast the EU framework with the United States, claiming that in the US, a dominant settlement platform enables tokenization of equities and other assets without volume caps.
The letter goes further by asserting that such an approach could cover as much as 150 trillion euros in assets. While the claim is presented as the coalition’s assessment, the underlying message is consistent: if Europe places restrictive caps on tokenized assets, global liquidity may gravitate to jurisdictions with fewer scaling constraints.
That comparison matters for investors and market operators because tokenization’s promise—especially for liquidity, settlement efficiency, and potentially broader access—depends on scale. Caps that are tight relative to market size can turn what should be regulatory sandboxes into permanent ceilings, reducing the economic case for deploying infrastructure in the region.
A repeated pattern: pressure on DLT rules over multiple months
This latest letter is not the first time firms have urged EU policymakers to adjust the DLT Pilot Regime. The coalition’s push follows earlier industry campaigns aimed at changing both the limits and the operational boundaries of the regime.
In April, 39 financial firms and industry groups—including Nasdaq and Boerse Stuttgart—called on EU policymakers to fast-track amendments and raise the regime’s overall limit to a range between 100 billion euros and 150 billion euros. That April proposal also sought broader asset eligibility and the removal of time limits on licenses issued under the program.
Earlier still, in February, tokenization and market infrastructure firms including Securitize, 21X and Boerse Stuttgart issued warnings that existing asset limits, volume caps and time-limited licenses were restricting the growth of regulated on-chain markets in Europe. That warning argued that without faster changes, liquidity could shift toward US markets as US regulators move toward larger-scale tokenization and onchain settlement.
Taken together, these efforts point to a recurring tension in the EU’s approach: the DLT Pilot Regime is designed as a testing framework, but industry participants want it to function more like a scalable launchpad for regulated tokenized markets. The letter from Sept. 7 reflects that shift in emphasis—from enabling pilots to ensuring they can grow beyond the early phase without hitting regulatory ceilings.
The push also arrives as distributed real-world assets (RWA) continue to build, even if the sector remains smaller than traditional capital markets. One cited figure in the source places the total value of distributed RWA at about $39.15 billion, excluding stablecoins, with US Treasury debt as the largest category at roughly $15.8 billion, according to RWA.xyz.
What to watch next
Lawmakers will now have to weigh whether the EU’s cap structure should be recalibrated to support tokenization scale, or whether limits should remain tighter for oversight reasons. For market participants, the key follow-up will be how the EU responds to the Sept. 7 request for either removal of the cap or a major increase to at least 500 billion euros—and whether revised thresholds continue to be based on admitted market value rather than other measures.
https://www.cryptobreaking.com/eu-finance-groups-seek-to/?utm_source=blogger%20&utm_medium=social_auto&utm_campaign=EU%20Finance%20Groups%20Seek%20to%20Lift%20Tokenized%20Securities%20Cap%20
Comments
Post a Comment