In a coordinated effort to influence European regulatory policy, a coalition of major financial institutions and market operators—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and several other prominent participants—has formally requested that the European Union reconsider the current monetary ceiling imposed on its tokenisation trial. The coalition argues that the existing limit is too restrictive for the ambitious projects already underway across the continent, and that a higher cap—or the removal of the cap altogether—would better accommodate the rapid evolution of digital asset markets and foster greater innovation. The request was submitted to the European Commission and the European Parliament as part of a broader dialogue on the future of tokenised securities, digital assets, and the underlying infrastructure that supports them.
The coalition’s letter highlights that the tokenisation trial, which was launched to explore the practicalities of issuing, trading, and settling tokenised financial instruments, currently operates under a financial ceiling that caps the total value of assets that can be tokenised within the sandbox environment. According to the coalition, this ceiling was originally set as a precautionary measure to mitigate risk while the regulatory framework was still being shaped.
However, as the trial has progressed, many participants have reported that the cap now hampers the scalability of their projects and limits the ability to demonstrate the full potential of tokenised securities. One of the coalition’s key arguments centers on the fact that several European projects have already reached, or are on track to exceed, the current limit. For example, a cross‑border bond issuance platform that involves multiple EU member states has already tokenised assets worth more than the allowed threshold.
Similarly, a pilot involving tokenised real‑estate funds in Germany and France has encountered constraints that prevent it from fully testing the liquidity and settlement efficiencies that tokenisation promises. These real‑world examples illustrate how the cap, while well‑intentioned, is now acting as a bottleneck rather than a safeguard. The coalition also points to the broader competitive landscape. Outside of Europe, jurisdictions such as the United States, Singapore, and the United Arab Emirates have adopted more flexible approaches to digital asset experimentation, often allowing higher transaction volumes and larger asset pools within their regulatory sandboxes.
By maintaining a comparatively low ceiling, the EU risks falling behind in attracting innovative fintech firms and capital‑raising activities that could otherwise be routed to more permissive markets. The coalition stresses that a more generous cap would not only align the EU with global best practices but also send a clear signal to investors and technology providers that Europe is committed to becoming a leading hub for tokenised finance. In addition to the practical concerns, the coalition underscores the regulatory rationale for raising the cap. They argue that the original risk‑mitigation logic—limiting exposure while regulators gain familiarity with the technology—can now be replaced by a more nuanced, risk‑based approach.
The trial has already generated valuable data on anti‑money‑laundering (AML) controls, investor protection mechanisms, and operational resilience. With this data in hand, regulators are better equipped to supervise larger‑scale tokenisation activities without compromising market integrity.
The coalition suggests that the EU could implement tiered caps that increase as participants demonstrate compliance and robust governance, thereby preserving oversight while encouraging growth. To support their request, the coalition provides a set of concrete recommendations: 1.
**Increase the monetary ceiling** – Raise the current cap from its present level (e.g., €5 billion) to a substantially higher figure, such as €20 billion, to accommodate the scale of existing projects. 2. **Introduce a tiered cap system** – Allow participants to graduate to higher caps based on demonstrated compliance, risk management, and operational track record.
3. **Expand the scope of eligible assets** – Permit a broader range of tokenised instruments, including corporate bonds, securitised assets, and tokenised real‑estate, to be included under the trial. 4.
**Enhance regulatory guidance** – Provide clearer, more detailed guidance on AML/KYC, custody, and investor disclosure requirements specific to tokenised securities. 5. **Facilitate cross‑border collaboration** – Encourage cooperation between national regulators to streamline cross‑jurisdictional tokenisation projects, reducing duplication and fostering harmonisation.
The coalition’s appeal arrives at a critical juncture for the EU’s digital finance agenda. The European Commission has recently published its Digital Finance Strategy, which emphasizes the need for a supportive regulatory environment for innovative financial products. By adjusting the tokenisation trial’s cap, the EU would be aligning its policy instruments with the strategic objectives outlined in that strategy, namely enhancing market efficiency, broadening access to capital, and promoting sustainable finance through tokenised green bonds and similar instruments. Stakeholders outside the immediate coalition have also weighed in.
Several fintech startups operating within the sandbox have expressed optimism that a higher cap would unlock new business models, such as fractional ownership of high‑value assets and real‑time secondary market trading of tokenised securities. Meanwhile, consumer‑protection groups have called for the EU to pair any cap increase with stronger safeguards, ensuring that investors receive clear information about the risks associated with tokenised assets. In response, EU officials have indicated a willingness to review the coalition’s recommendations. A spokesperson from the European Commission’s Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) stated that the Commission is “actively monitoring the outcomes of the tokenisation trial and is open to adjusting the parameters of the sandbox to better reflect market realities.” The spokesperson also highlighted that any amendment to the cap would be subject to a thorough impact assessment, taking into account both the benefits of increased liquidity and the need to maintain robust oversight.
Overall, the coalition’s request reflects a broader sentiment among market participants that the regulatory environment must evolve in step with technological advancements. By advocating for a higher or removed cap, Nasdaq, Börse Stuttgart, and their allies aim to create a more conducive setting for the development of tokenised financial products that could revolutionise capital markets across Europe. If the EU adopts these suggestions, it could accelerate the transition to a more digitised, efficient, and inclusive financial ecosystem, positioning Europe as a leader in the next generation of securities trading and settlement. The next steps will likely involve detailed consultations between the coalition, EU regulators, and other interested parties.
These discussions will determine the precise parameters of any cap adjustment, the timeline for implementation, and the accompanying regulatory refinements needed to safeguard market participants while fostering innovation. The outcome of this dialogue will be closely watched by the global fintech community, as it may set a precedent for how major economies balance risk management with the pursuit of cutting‑edge financial technology.