In a coordinated move that underscores the growing momentum behind digital asset innovation, a coalition of leading financial institutions—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and several other prominent market participants—has formally appealed to European Union regulators to either remove the current ceiling on tokenised assets or substantially raise it within the framework of the EU’s ongoing tokenisation trial. The coalition’s position paper, submitted to the European Commission and the European Securities and Markets Authority (ESMA), argues that the present cap, set at a modest €5 billion for the total value of assets that can be tokenised under the pilot, is far too restrictive to accommodate the scale and ambition of projects already underway across the continent.
The tokenisation trial, launched in early 2023 under the EU’s Markets in Crypto‑Assets (MiCA) regulatory package, was designed as a sandbox environment where issuers could experiment with converting traditional securities—such as equities, bonds, and real‑estate assets—into blockchain‑based tokens. The goal was to test the technological, legal, and operational frameworks needed for a seamless transition to a digitised securities market, while ensuring investor protection and market integrity. However, as the pilot progressed, a number of participants reported that the €5 billion aggregate limit quickly became a bottleneck, preventing them from fully demonstrating the potential efficiencies, liquidity enhancements, and cost reductions that tokenisation promises.
In its submission, the coalition highlighted several concrete examples where the cap has already been exceeded. One notable case involves a cross‑border green‑bond issuance by a consortium of German and French municipalities, which aimed to raise €8 billion to fund renewable‑energy infrastructure. Although the bond was successfully tokenised on a private‑ledger platform, the total value of the tokenised tranche could not be fully accounted for within the pilot’s limit, forcing the issuers to retain a portion of the issuance in a conventional, non‑tokenised form. Similarly, a fintech startup based in the Netherlands, in partnership with a major Dutch bank, attempted to tokenise a portfolio of small‑ and medium‑enterprise (SME) loans totalling €6.2 billion.
The venture was forced to scale back its rollout, citing the cap as a prohibitive constraint that undermined the pilot’s objective of showcasing broader financial inclusion. Beyond these specific projects, the coalition argues that the cap hampers the EU’s strategic ambition to position itself as a global leader in the emerging digital securities market. By contrast, jurisdictions such as the United States and Singapore have adopted more flexible approaches, allowing tokenised asset values to scale in line with market demand. The coalition warns that without a comparable regulatory environment, Europe risks losing innovative firms to more permissive jurisdictions, potentially ceding technological leadership and associated economic benefits.
To address these concerns, the coalition proposes two possible pathways for the EU. The first is a complete removal of the aggregate cap, thereby allowing tokenised assets of any size to participate in the pilot. This approach would align the EU’s sandbox with the principle of “regulatory sandboxes” worldwide, which typically impose minimal quantitative restrictions to foster experimentation. The second pathway is a calibrated increase of the ceiling to €20 billion, a figure derived from an analysis of current and projected tokenisation pipelines across European markets.
The coalition contends that this higher threshold would be sufficient to accommodate existing projects while still providing regulators with a manageable scope for oversight. In addition to the quantitative arguments, the coalition emphasizes qualitative benefits that a higher cap would unlock.
These include: 1. **Enhanced Liquidity** – Larger tokenised pools attract a broader base of institutional and retail investors, creating deeper secondary markets and tighter bid‑ask spreads. 2.
**Cost Efficiency** – Scaling tokenisation reduces per‑transaction costs related to settlement, custody, and compliance, translating into tangible savings for issuers and investors alike. 3. **Cross‑Border Harmonisation** – A more permissive cap encourages collaboration among issuers, custodians, and platform providers across EU member states, fostering a truly pan‑European digital market.
4. **Innovation Ecosystem Growth** – Start‑ups and fintech firms can more confidently develop solutions when they know that regulatory constraints will not arbitrarily limit the size of their pilots. The coalition also outlines a set of safeguards to accompany any increase in the cap.
These include enhanced reporting requirements for tokenised assets exceeding €10 billion, mandatory stress‑testing of underlying blockchain infrastructure, and periodic audits by independent third parties to verify compliance with MiCA’s investor‑protection standards. By pairing a higher limit with robust supervisory mechanisms, the coalition aims to reassure regulators that market stability will not be compromised. EU officials have so far responded positively to the dialogue, acknowledging that the initial cap was intended as a cautious starting point.
A spokesperson for the European Commission noted that the feedback from market participants will be taken into account as the pilot progresses toward its scheduled conclusion in late 2025. The Commission has indicated that it will convene a stakeholder workshop in early 2027 to review the pilot’s outcomes and consider potential adjustments to the regulatory framework, including the possibility of raising the cap. Analysts observing the development suggest that the coalition’s request could mark a pivotal moment for the EU’s digital finance agenda. If the cap is lifted or significantly increased, Europe could see a surge in tokenised asset offerings, ranging from corporate bonds and securitised loans to tokenised real‑estate funds and even fractional ownership of infrastructure projects.
Such a wave of activity would not only deepen the EU’s capital markets but also provide a testbed for next‑generation services such as automated compliance via smart contracts, real‑time reporting, and integrated ESG (environmental, social, and governance) data layers. In conclusion, the joint appeal by Nasdaq, Börse Stuttgart, and their fellow market participants reflects a growing consensus that the EU’s tokenisation sandbox must evolve to keep pace with market realities. By either removing the €5 billion ceiling or raising it to a level that mirrors the actual size of European tokenisation initiatives, regulators can unlock the full potential of digital securities, reinforce Europe’s competitive standing, and deliver tangible benefits to issuers, investors, and the broader economy. The forthcoming discussions between the coalition and EU authorities will be closely watched as an indicator of how swiftly Europe is willing to adapt its regulatory framework to the rapidly changing landscape of digital finance.