A coalition of European financial and tokenization groups, including Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute, and Axiology, has formally requested that EU lawmakers eliminate a proposed 100 billion euro ($116.3 billion) cap on tokenized financial instruments. In a draft letter dated September 7 addressed to the EU Council and the European Parliament’s Economic and Monetary Affairs Committee, the signatories argued that if a limit is retained, it should be raised to at least 500 billion euros. The groups contended that the current proposal is insufficient because some existing European projects already reach 350 billion euros in scale and plan for further growth.
The request targets revisions within the European Commission’s Market Integration and Supervision Package, which proposes increasing the Distributed Ledger Technology (DLT) Pilot Regime's current 6 billion euro limit to 100 billion euros. The DLT Pilot Regime, effective since 2023, allows firms to test blockchain-based trading under specific exemptions. The letter highlighted a competitive disparity with the United States, where major settlement platforms can tokenize assets without volume caps, potentially covering up to 150 trillion euros. This push follows earlier industry efforts in April and February, where firms warned that strict asset limits and time-limited licenses were hindering the scaling of regulated onchain markets in Europe.
This development underscores the tension between regulatory caution and market scalability in the European digital asset landscape. By contrasting the EU's proposed 100 billion euro ceiling with the uncapped US environment, industry leaders are framing the issue as one of competitive viability rather than mere compliance burden. The argument that existing projects already exceed the proposed limit suggests that the current regulatory framework may be outpaced by actual market adoption, forcing policymakers to choose between stifling domestic innovation or accepting higher risk thresholds to maintain global relevance.
From a Market Structure perspective, the push to raise or remove caps signals a maturing institutional demand for tokenized securities that exceeds the pilot regime's original experimental scope. If the EU retains low thresholds, it risks accelerating the migration of liquidity and infrastructure development to jurisdictions with more permissive frameworks, such as the US. Stakeholders should watch whether the European Parliament accepts the 500 billion euro baseline as a compromise or aligns fully with the call for no caps, as this decision will define the operational boundaries for institutional custody and settlement infrastructure in Europe.
