In a coordinated effort that underscores the growing momentum behind digital asset innovation, a coalition of prominent market participants—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and a host of other financial institutions—has formally appealed to European Union regulators to either lift the existing ceiling on tokenised assets or significantly increase it within the framework of the EU’s tokenisation pilot programme. This request stems from a collective assessment that the current cap, which limits the total value of assets that can be tokenised under the pilot, is overly restrictive and hampers the full realisation of the benefits that tokenisation promises for capital markets, investors, and issuers alike. The coalition’s position paper outlines several key arguments.
First, it points to the rapid evolution of blockchain and distributed ledger technologies (DLTs) that enable the creation, issuance, and trading of tokenised securities with unprecedented speed, transparency, and cost efficiency. By converting traditional financial instruments—such as equities, bonds, and even real‑estate holdings—into digital tokens, market participants can unlock new levels of liquidity, broaden investor access, and streamline settlement processes that historically have been cumbersome and prone to error. Second, the signatories note that the pilot’s current monetary ceiling—set at a modest figure relative to the overall size of European capital markets—creates a bottleneck that prevents many promising projects from participating.
Several ongoing European tokenisation initiatives, already in advanced stages of development, have reported that the amount they wish to tokenise exceeds the pilot’s limit. These projects span a diverse range of asset classes, from mid‑cap corporate bonds and green financing instruments to tokenised shares of small and medium‑sized enterprises (SMEs) seeking to tap new pools of capital.
By keeping the cap low, the EU inadvertently curtails the pilot’s ability to serve as a true testbed for large‑scale, cross‑border tokenised securities. Moreover, the coalition argues that a higher cap—or the removal of the cap altogether—would generate valuable data and insights for regulators. A broader sample of tokenised transactions across different jurisdictions, asset types, and market participants would enable the European Securities and Markets Authority (ESMA) and national regulators to better understand risk dynamics, operational challenges, and compliance considerations inherent in a tokenised ecosystem. This, in turn, would inform the development of a robust, proportionate regulatory framework that balances investor protection with innovation.
In its submission, the coalition also highlights the competitive risk of falling behind other major financial centres that have already embraced more permissive approaches to tokenisation. The United States, Singapore, and several Asian markets have introduced regulatory sandboxes and higher thresholds that attract issuers looking to experiment with digital assets at scale. By maintaining a restrictive cap, the EU risks losing market share and the opportunity to position Europe as a global hub for tokenised finance.
The coalition’s request is not merely a plea for deregulation; it is accompanied by concrete proposals for how a higher cap could be managed responsibly. These include: 1. **Tiered Cap Structure**: Implementing a graduated cap system where larger, more established issuers are allowed higher tokenisation limits, while smaller participants continue under the existing threshold. This approach would mitigate systemic risk while encouraging broader participation.
2. **Enhanced Reporting Requirements**: Mandating detailed, real‑time reporting of tokenised transactions to a central EU‑run ledger, ensuring transparency and enabling regulators to monitor market activity effectively. 3. **Risk‑Based Supervision**: Applying a risk‑based supervisory model that focuses regulatory resources on high‑value or high‑complexity tokenised offerings, rather than a one‑size‑fits‑all approach.
4. **Collaboration with Industry Bodies**: Establishing a permanent advisory panel composed of market participants, technology providers, and consumer‑advocacy groups to continuously assess the impact of the tokenisation pilot and recommend adjustments. By adopting these measures, the EU could safely expand the pilot’s scope while preserving market integrity.
The coalition stresses that the ultimate goal is to create an environment where tokenisation can thrive, delivering tangible benefits such as reduced settlement times—from days to minutes—lower transaction costs, and greater inclusivity for retail investors who previously faced high entry barriers. In summary, Nasdaq, Börse Stuttgart, and their allied partners are urging EU policymakers to reconsider the tokenisation pilot’s monetary ceiling. They contend that the existing limit is out of step with the scale of current European projects and the broader global trend toward digital asset adoption.
Raising or eliminating the cap would not only enable more projects to participate but also furnish regulators with richer data, enhance Europe’s competitive standing, and accelerate the transition to a more efficient, transparent, and accessible capital market ecosystem. The coalition stands ready to work collaboratively with EU authorities to design and implement a cap‑adjustment framework that safeguards investors while unlocking the full potential of tokenised finance.