In a coordinated effort to shape the future of digital assets, a coalition of leading market operators—including Nasdaq, Boerse Stuttgart, and several other prominent exchanges—has formally appealed to European regulators to either eliminate or substantially raise the current ceiling that limits the scope of tokenisation projects under the EU’s experimental framework. The request comes as the pilot programme, launched by the European Commission to test the viability of tokenised securities, progresses into its second year, and participants are beginning to encounter practical constraints that they argue undermine the trial’s original objectives.
The coalition’s letter, addressed to the European Commission’s Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA), outlines a series of concrete concerns. Foremost among them is the observation that the existing cap—set at a modest €5 billion for the aggregate value of tokenised assets that can be issued under the sandbox—has already been reached by a number of pioneering projects across the continent.
The signatories cite examples from Germany, France and the Netherlands where tokenisation pilots involving corporate bonds, real‑estate funds and infrastructure financing have quickly exceeded the prescribed limit, forcing participants to truncate their offerings or postpone further issuance. “While the pilot has been instrumental in demonstrating the technical feasibility of distributed ledger technology for securities, the artificial ceiling imposed by the current regulation is now acting as a bottleneck,” the letter reads. “If the EU wishes to capture the full economic potential of tokenisation—greater liquidity, broader investor access and more efficient settlement—then the cap must be adjusted to reflect the market’s rapid evolution.” Nasdaq, a global leader in exchange technology and market infrastructure, emphasizes that its own tokenisation initiatives, which include a suite of tokenised equity products for institutional investors, have already generated demand that outstrips the €5 billion threshold.
Similarly, Boerse Stuttgart, which has been at the forefront of Germany’s tokenised bond market, reports that its pilot projects involving small‑ and medium‑sized enterprises (SMEs) have attracted commitments well beyond the current limit, prompting concerns that innovative financing solutions for these firms could be stifled. The coalition also points to the broader strategic context. The European Union has positioned itself as a champion of digital finance, aiming to create a single market for crypto‑assets that rivals the United States and Asia. By maintaining a restrictive cap, the EU risks sending a mixed signal to both domestic innovators and foreign competitors, potentially driving capital and talent to jurisdictions with more permissive regulatory regimes.
The letter references the United Kingdom’s recent decision to lift its own tokenisation limits, noting a surge in cross‑border projects that have chosen London as a hub for digital securities. In addition to the quantitative argument, the coalition provides qualitative evidence that a higher ceiling would foster deeper market integration.
Tokenised assets, by design, can be fractionalised, enabling a wider pool of retail investors to participate in markets that were previously inaccessible due to high entry barriers. Raising the cap would allow issuers to structure multi‑tranche offerings, combine different asset classes within a single token, and experiment with novel governance models—all of which are essential for testing the full spectrum of benefits that tokenisation promises. The letter does not merely request a blanket removal of the limit; it proposes a calibrated approach.
The coalition suggests a tiered framework in which the cap is linked to measurable milestones such as the number of active tokenised securities, the volume of secondary market trading, and the robustness of compliance and anti‑money‑laundering (AML) controls. Under this model, the ceiling could be automatically increased once predefined thresholds are met, ensuring that regulatory oversight scales proportionally with market growth. Regulators, for their part, have acknowledged the concerns.
In a recent press briefing, a DG FISMA spokesperson indicated that the Commission is reviewing feedback from pilot participants and will consider adjustments to the regulatory sandbox before the trial’s scheduled conclusion in 2025. The spokesperson highlighted the importance of striking a balance between fostering innovation and safeguarding financial stability, noting that any amendment would be accompanied by enhanced reporting requirements and risk‑monitoring mechanisms. Industry observers welcome the coalition’s proactive stance, viewing it as a sign that market participants are willing to engage constructively with policymakers. “The dialogue between exchanges and regulators is crucial for building a resilient tokenised market ecosystem,” says Dr.
Elena Rossi, a senior analyst at the European Financial Innovation Institute. “By presenting data‑driven arguments and offering a phased‑increase proposal, the coalition demonstrates that it is not merely seeking deregulation but responsible evolution.” If the EU decides to raise or eliminate the cap, the implications could be far‑reaching. A larger tokenisation window would likely accelerate the launch of new products, such as tokenised mortgage‑backed securities, green bonds tied to climate‑friendly projects, and even tokenised intellectual‑property rights. Moreover, it could enhance the EU’s appeal as a destination for fintech startups seeking a supportive regulatory environment, thereby strengthening the region’s competitiveness on the global stage.
Conversely, maintaining the status quo could compel innovators to look elsewhere, potentially leading to a fragmentation of the European digital asset market. Companies might relocate tokenisation pilots to jurisdictions with more flexible limits, thereby diminishing the EU’s ability to set standards and capture the associated economic benefits. In summary, the coalition’s appeal underscores a pivotal moment for the EU’s tokenisation experiment.
By reconsidering the current €5 billion cap—whether through removal or a structured increase—the Commission has an opportunity to align regulatory parameters with the rapid pace of technological advancement and market demand. The outcome of this dialogue will likely shape not only the trajectory of the pilot but also the broader ambition of the European Union to become a global leader in the emerging world of tokenised finance.