European Finance Groups Call for Higher Cap on Tokenized Securities
EU Industry Coalition Demands Removal of Tokenization Cap
A coalition of European financial and tokenization groups has urged EU lawmakers to remove a proposed 100 billion euro cap on tokenized financial instruments. In a draft letter dated Sept. 7, the groups argued that if a cap remains, it should be raised to at least 500 billion euro.
The letter was addressed 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.
Key Industry Demands and Rationale
- The coalition seeks to eliminate the proposed 100 billion euro cap or set a 500 billion euro baseline.
- Existing European projects already reach 350 billion euro in scale, making the 100 billion euro ceiling insufficient.
- The cap applies to the market value of financial instruments admitted to distributed ledger technology (DLT) infrastructure, not trading volume, so it is small compared to global equity markets.
- The groups contrasted the EU with the US, where no volume caps exist for tokenized assets, potentially covering up to 150 trillion euro.
Context: The DLT Pilot Regime and Previous Advocacy
The demand follows the European Commission's proposal to raise the current 6 billion euro limit to 100 billion euro as part of the Market Integration and Supervision Package. This package includes revisions to the DLT Pilot Regime, which took effect in 2023 and allows firms to test blockchain-based trading and settlement under exemptions from certain EU financial rules.
In April, 39 financial firms and groups, including Nasdaq and Boerse Stuttgart, urged EU policymakers to fast-track changes and raise limits to between 100 billion and 150 billion euro. Earlier, in February, tokenization and market infrastructure firms warned that existing limits could push liquidity to US markets.
Why This Matters for European Markets
The letter highlights that without higher limits, Europe risks losing out on growing tokenization trends. The total value of distributed real-world assets (RWA) stands at about $39.15 billion, with US Treasury debt as the largest category at roughly $15.8 billion. Industry groups argue that restrictive caps could hinder the scaling of regulated onchain markets in the EU.
What Happens Next
The draft letter is part of ongoing pressure from finance groups seeking changes to the DLT Pilot Regime. No specific timeline or next steps from EU lawmakers are mentioned in the sources.
