Financial Groups Urge EU to Remove or Raise Tokenization Cap
Industry Push for Changes to EU Tokenization Trial
A coalition of financial and crypto industry groups has written to the European Union, urging lawmakers to remove or increase a cap on tokenized securities. Tokenization involves representing assets like stocks or bonds as digital tokens on a blockchain, which is a type of digital ledger.
The groups argue that the proposed limit of 100 billion euros is too low and could hinder market growth.
Key Demands from the Letter
- The EU's draft rule sets a cap of 100 billion euros on the value of tokenized securities allowed under a pilot regime.
- The coalition wants the cap removed entirely or raised to at least 1.5 trillion euros.
- Some existing European projects already exceed the proposed cap, with values over 350 billion euros.
What the Letter to EU Lawmakers Says
The letter was addressed to the European Council and European Parliament. Signatories include the French digital asset association Adan, the Crypto Council for Innovation, the European Ethereum Institute, and companies such as Nasdaq and Boerse Stuttgart.
The signatories warn that the current cap is insufficient. They note that the limit is based on the market value of securities, not trading volume, meaning platforms are restricted by the assets they support.
They also oppose rules that would allow traditional central securities depositories to have higher capacity limits than newer blockchain-based market operators, calling this unfair.
Confirmed Facts from the Source
- The European Commission proposed increasing the cap from 6 billion euros to 100 billion euros.
- The coalition prefers no cap or a 1.5 trillion euro ceiling.
- The letter states that some projects already have over 350 billion euros in tokenized assets, but does not name them.
- The pilot regime allows testing of tokenized assets with exemptions from certain financial rules.
What Remains Unclear
The source does not identify the specific European projects that exceed 350 billion euros. It also does not explain how that figure was calculated.
Why This Matters for Financial Innovation
A low cap could limit European platforms' ability to grow and compete globally. The letter contrasts Europe's proposal with a U.S. settlement platform that has no similar volume caps, suggesting potential competitive disadvantages.
