In recent weeks, a coalition of major financial market participants—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and a number of other prominent exchanges and technology firms—has formally appealed to European Union regulators to either remove the current ceiling on tokenised assets or to increase it substantially. The request stems from growing concerns that the existing limit, which caps the total value of assets that can be issued in tokenised form under the EU’s pilot regime, is now acting as a bottleneck for innovation and for the broader adoption of blockchain‑based financial products across the continent. The EU’s tokenisation pilot, launched under the Markets in Crypto‑Assets (MiCA) framework, was designed to provide a controlled environment in which issuers could experiment with security tokens, asset‑backed tokens, and other forms of digital representations of real‑world assets. The pilot includes a maximum aggregate issuance value of €1 billion for any single project, a figure that was deemed appropriate when the rules were first drafted.
However, as the market has matured, several projects have quickly outgrown this threshold. Participants in the coalition argue that the cap now hampers the ability of large‑scale, cross‑border tokenisation initiatives to reach their full potential, thereby limiting the EU’s competitiveness relative to other jurisdictions such as the United States, Singapore, and the United Arab Emirates, where regulatory frameworks are more flexible. Nasdaq, a global leader in exchange technology and market data, highlighted that its own tokenisation platform, which enables the creation of digital securities for a variety of asset classes, has already attracted interest from issuers whose projected tokenised offerings would exceed the €1 billion limit.
In a statement to the European Commission, Nasdaq’s senior vice‑president for digital assets explained that the cap forces these issuers either to split their offerings into multiple, smaller tokens—thereby increasing complexity and operational costs—or to abandon the EU market altogether in favour of more permissive jurisdictions. Nasdaq’s position is that a higher cap, or the removal of the cap entirely, would encourage larger, more liquid token markets, improve price discovery, and attract a broader pool of institutional investors. The Stuttgart Stock Exchange, one of Germany’s leading venues for trading equities and derivatives, echoed similar concerns. Börse Stuttgart’s chief digital officer noted that several German and pan‑European projects are already in the advanced stages of tokenising real‑estate portfolios, infrastructure assets, and even small‑ and medium‑sized enterprise (SME) equity.
These projects, according to the exchange, are projected to raise well beyond the current ceiling, with some estimates reaching €2‑3 billion in total tokenised value. The exchange argued that the cap not only discourages domestic innovation but also undermines the EU’s ambition to become a global hub for sustainable finance, as many of the tokenised projects are tied to green bonds and other environmentally focused instruments. Beyond the individual statements from Nasdaq and Börse Stuttgart, the coalition includes a range of technology providers, custodial services, and legal firms that specialise in digital asset compliance.
Collectively, they have submitted a joint memorandum to the European Commission and the European Securities and Markets Authority (ESMA), outlining a series of recommendations: 1. **Raise the aggregate issuance limit** – Increase the cap from €1 billion to at least €5 billion, with a provision for periodic review based on market growth. 2. **Introduce a tiered cap system** – Allow larger, well‑capitalised issuers to apply for higher thresholds on a case‑by‑case basis, subject to rigorous risk‑management standards.
3. **Simplify the approval process** – Streamline the regulatory filing and approval workflow for tokenised offerings, reducing time‑to‑market while maintaining investor protection. 4. **Enhance cross‑border interoperability** – Align the EU tokenisation regime with emerging standards in other major markets to facilitate seamless trading and settlement across jurisdictions.
5. **Promote secondary‑market liquidity** – Encourage the development of regulated secondary venues where tokenised assets can be traded, thereby improving market depth and price stability. The coalition’s argument is not solely about the size of the cap; it also touches on the broader ecosystem needed for tokenised assets to thrive.
They emphasise that a higher limit would enable issuers to create more diversified token baskets, which can be packaged into investment funds or exchange‑traded products (ETPs). Such products would, in turn, attract institutional investors who require scale and liquidity to meet their fiduciary duties.
Moreover, a larger cap would support the EU’s strategic goals around digital finance, including the European Green Deal, by allowing larger volumes of green‑linked tokens to be issued and traded. Critics of the proposal caution that lifting the cap could expose investors to greater systemic risk if not accompanied by robust supervisory mechanisms. They argue that the pilot phase is intended to test the resilience of tokenised markets under controlled conditions, and that a sudden increase in allowable issuance size might outpace the development of necessary safeguards, such as real‑time monitoring, anti‑money‑laundering (AML) controls, and investor‑education initiatives. In response, the coalition has pledged to work closely with regulators to co‑design risk‑mitigation tools, including mandatory disclosures, third‑party audits of underlying assets, and the use of smart‑contract escrow mechanisms to protect investor funds.
The European Commission has so far indicated that it will review the coalition’s memorandum as part of its broader assessment of the MiCA framework, which is scheduled for a comprehensive evaluation by the end of 2025. ESMA, meanwhile, has opened a public consultation on the tokenisation pilot, inviting feedback from market participants, consumer groups, and academia. The consultation period is expected to run for three months, after which a report will be drafted outlining potential regulatory adjustments. In summary, the request from Nasdaq, Börse Stuttgart, and their allied partners reflects a growing consensus that the EU’s current tokenisation cap is no longer fit for purpose.
By advocating for a higher or eliminated ceiling, they aim to unlock the full potential of digital securities, promote cross‑border capital flows, and position Europe at the forefront of the emerging digital finance landscape. Whether regulators will heed these calls remains to be seen, but the dialogue underscores the dynamic tension between fostering innovation and safeguarding market stability in the rapidly evolving world of tokenised assets.