EU Industry Wants Higher or No Cap for Tokenized Securities
The coalition around Nasdaq and Boerse Stuttgart wants more room for the EU DLT Pilot Regime. The current cap would slow tokenized stocks, bonds, and funds in Europe too much.
Key Takeaways
- European financial and crypto organizations want the cap for tokenized securities platforms removed or raised to at least 1.5 trillion euros.
- The European Commission is proposing to raise it from 6 billion to 100 billion euros, but the coalition says that is still too low.
- The industry fears that a limit will slow tokenization growth and put European players at a disadvantage versus the United States.
European financial and crypto organizations want Brussels to remove the limit for tokenized securities platforms or raise it to at least 1.5 trillion euros. According to the coalition, the proposed 100 billion euro cap is slowing tokenization growth in Europe, while the market for tokenized assets is growing quickly worldwide.
Pressure on Brussels Limit
The call is laid out in a letter to the European Council and the European Parliament. Signers include the French industry group Adan, the Crypto Council for Innovation, and the European Ethereum Institute, along with companies like Nasdaq and Boerse Stuttgart.
The European Commission wants to raise the existing ceiling from 6 billion euros to 100 billion euros. According to the signers, that is still too low. They would rather see the cap removed entirely, or at least set at 1.5 trillion euros, fifteen times higher than the Commission's proposal.
The letter is about the European DLT Pilot Regime, which lets parties test tokenized stocks, bonds, and investment funds for trading and settlement with exemptions from certain existing rules. The Commission previously called participation in that regime "modest," and wants to expand the framework for that reason.
Why the Industry Objects
Tokenization means financial instruments are put on a blockchain as digital assets. The coalition says some European projects are already reaching 350 billion euros in tokenized assets and want to keep growing, although those projects are not named and it is not explained exactly how that figure was calculated.
The signers also stress that the limits are based on the market value of admitted securities, not trading volume. That means a platform's capacity depends on the value of the instruments it supports, even if relatively little is traded.
The group is also pushing back against different limits for central securities depositories, which handle securities registration and settlement. According to the coalition, those parties would then get much more room than other blockchain market players, which would hurt new providers.
European Market Looks to the US
For European crypto and capital markets watchers, this matters because tokenization is increasingly seen as a bridge between traditional investment products and blockchain. Industry observers point out that the global market for tokenized real-world assets is now above 26 billion dollars, with tokenized US Treasury bonds making up a large part of that.
The debate over rules for tokenized stocks is also growing in the US, where Robinhood is urging regulators to allow blockchain stocks. If the EU keeps a cap, the group wants the Commission to be able to raise it later without a preset maximum. That should keep the rules from falling behind the market's growth.
The coalition also contrasts Europe with the United States, where a dominant settlement party could tokenize stocks and other assets without a volume cap, according to the letter. If the EU keeps a cap, the group wants the Commission to be able to raise it later without a preset maximum. That should keep the rules from falling behind the market's growth.
