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 draft letter, dated September 7 and addressed to EU Council members and the European Parliament's Economic and Monetary Affairs Committee, argued that a 500 billion euro threshold should serve as the minimum if lawmakers retain any cap.
Signatories to the letter included Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute, and Axiology. The groups cited existing European projects that already reach 350 billion euro in scale and plan further expansion, asserting that a 100 billion euro ceiling would prove insufficient.
The letter highlighted the regulatory disparity between Europe and the United States, where a dominant settlement platform is enabled to tokenise US equities and other assets without volume caps, potentially covering as much as 150 trillion euro in assets.
Context on the DLT Pilot Regime
The European Commission has proposed raising 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. The DLT Pilot Regime, which took effect in 2023, allows financial firms to test blockchain-based trading and settlement of assets such as stocks and bonds under exemptions from certain EU financial rules.
The proposed thresholds apply to the market value of financial instruments admitted to DLT infrastructure rather than their trading volume, making the 100 billion euro cap relatively modest compared with global equity markets.
Mounting Industry Pressure
This letter follows months of advocacy from financial and tokenization firms seeking changes to the DLT Pilot Regime. In April, 39 financial firms and industry groups, including Nasdaq and Boerse Stuttgart, urged EU policymakers to fast-track changes and raise the overall limit to between 100 billion euro and 150 billion euro. That effort also called for broader asset eligibility and removal of time limits on licenses issued under the regime.
In February, tokenization and market infrastructure firms including Securitize, 21X, and Boerse Stuttgart warned that existing asset limits, volume caps, and time-limited licenses were preventing regulated onchain markets from scaling in Europe. They cautioned that without faster changes, liquidity could migrate to US markets as regulators there moved toward larger-scale tokenization and onchain settlement.
The total value of distributed real-world assets stands at approximately $39.15 billion, with US Treasury debt representing the largest category at roughly $15.8 billion.
