In a coordinated effort that underscores the growing significance of digital assets in traditional finance, a coalition of major market participants—including Nasdaq, the Börse Stuttgart, and several other leading exchanges and fintech firms—has formally appealed to European Union regulators to either eliminate the existing ceiling on tokenised securities or, at a minimum, raise it substantially. The coalition’s request stems from a practical observation: a number of ongoing European tokenisation projects have already bumped against, and in some cases exceeded, the current regulatory cap, thereby limiting their scalability and the broader ambition to integrate blockchain‑based instruments into mainstream capital markets. The request was submitted to the European Commission and the European Securities and Markets Authority (ESMA) as part of the EU’s broader “Tokenisation Pilot” framework, which was introduced last year to test the feasibility of issuing, trading, and settling tokenised assets under a harmonised regulatory environment.
The pilot was designed to provide a sandbox in which innovators could experiment with distributed‑ledger technology (DLT) while operating under a set of clear, albeit provisional, rules. One of those provisional rules is a monetary ceiling that restricts the total value of tokenised securities that can be issued under the pilot to a relatively modest amount. While the cap was intended to manage risk during the experimental phase, market participants now argue that it is proving to be a bottleneck rather than a safeguard. According to the coalition’s statement, the current limit—set at €1 billion for the entire pilot—does not reflect the rapid pace at which institutional investors and issuers are embracing tokenisation as a means to improve liquidity, reduce settlement times, and lower transaction costs.
Several projects that have already launched tokenised bonds, equity shares, and even real‑estate fractions have reported that the cap curtails their ability to attract sufficient capital and to demonstrate the full potential of DLT‑driven securities. For instance, a cross‑border tokenised bond issuance by a consortium of German and French banks, which was slated to raise €750 million, now faces the prospect of being forced to split the offering into multiple, smaller tranches. Such fragmentation not only adds administrative overhead but also dilutes the market‑making benefits that a single, larger issuance would provide. The coalition’s appeal is anchored in three core arguments.
First, the cap undermines the pilot’s original objective of testing scalability. If participants cannot issue securities at a size that mirrors real‑world market conditions, the pilot cannot generate meaningful data on how tokenised assets behave under stress, how liquidity providers respond, or how settlement infrastructures cope with high volumes. Second, the limitation hampers competition.
Smaller fintech firms that lack the resources to create multiple parallel issuances are at a disadvantage compared to larger incumbents that can more easily navigate the regulatory maze. This could inadvertently entrench the market power of established exchanges, contrary to the EU’s stated aim of fostering innovation and diversification. Third, the cap creates legal uncertainty for investors who may be wary of committing capital to tokenised securities that could be forced to be restructured or withdrawn if the limit is reached.
In response, the coalition proposes two possible pathways for the EU. The preferred option is the outright removal of the monetary ceiling, thereby allowing tokenised securities of any size to be issued under the pilot’s regulatory umbrella. As a fallback, the coalition suggests a substantial increase—potentially raising the limit to €5 billion or more—paired with a tiered monitoring system that would trigger additional supervisory checks only if issuances exceed certain thresholds. This approach, the coalition argues, would preserve the EU’s risk‑mitigation goals while providing the flexibility needed for genuine market testing.
Regulators have so far acknowledged the concerns but have not yet indicated a definitive stance. ESMA’s head of market infrastructure, in a recent press briefing, noted that the pilot is still in its early stages and that the Commission is reviewing feedback from participants on an ongoing basis. “We are committed to striking the right balance between fostering innovation and ensuring investor protection,” the official said.
“If the current parameters are found to be overly restrictive, we will consider adjustments in line with the pilot’s overarching objectives.” Industry analysts view the coalition’s request as a natural evolution of the tokenisation experiment. “When the pilot was launched, the €1 billion cap made sense as a precautionary measure,” says Maria Keller, a senior analyst at EuroFinTech Research. “But the market has matured quickly, and we’re seeing real demand for larger tokenised offerings. Adjusting the cap is the logical next step if the EU wants to remain a leader in digital finance.” Beyond the immediate practicalities, the debate touches on broader strategic questions about the EU’s digital finance agenda.
The European Commission’s Digital Finance Package, unveiled in 2023, set out an ambitious roadmap to create a single market for digital assets, including stablecoins, crypto‑assets, and tokenised securities. A flexible, well‑calibrated tokenisation pilot is a cornerstone of that vision, serving as a proof‑of‑concept for how blockchain can be woven into the fabric of capital markets without compromising stability.
By revisiting the cap, the EU has an opportunity to demonstrate that it can adapt its regulatory framework responsively, thereby attracting further investment from both domestic and international issuers. Stakeholders outside the immediate coalition have also weighed in. Investor advocacy groups caution that any increase in the cap should be accompanied by robust transparency requirements and clear disclosure standards, ensuring that retail participants are not exposed to undue risk.
Meanwhile, technology providers argue that a higher cap would justify greater investment in DLT infrastructure, such as scalable settlement platforms and interoperable token standards, which are currently being developed in parallel with the pilot. In summary, the coalition’s appeal to the EU reflects a maturing ecosystem where tokenisation is moving from proof‑of‑concept to commercial viability. By either removing or substantially raising the current monetary ceiling, regulators would enable larger, more representative tokenised securities offerings, generate richer data for policy‑making, and reinforce Europe’s position as a hub for innovative financial technology.
The next few weeks will likely see intensive dialogue between the coalition, regulators, and other market participants as the EU weighs the trade‑offs between risk management and the desire to unlock the full potential of tokenised assets.