In a coordinated effort that underscores the growing importance of digital assets in the financial sector, a coalition of prominent market participants—including Nasdaq, the German exchange Boerse Stuttgart, and a host of other industry stakeholders—has formally appealed to European Union regulators to either eliminate the existing ceiling on tokenisation projects or, at a minimum, raise it to a level that reflects the rapid evolution of the market. The request comes against the backdrop of the EU’s recent launch of a tokenisation pilot programme, which was designed to explore the potential of blockchain‑based securities and to provide a controlled environment for testing innovative financial products. As part of that initiative, the European Commission set a maximum aggregate value of €1 billion for all tokenised assets that could be issued under the trial. While the cap was intended to mitigate risk and allow regulators to gather data on a manageable scale, the coalition argues that the ceiling now acts as a bottleneck, stifling the very innovation the pilot was meant to encourage.
According to the coalition’s statement, several ongoing European projects have already reached or exceeded the €1 billion threshold, effectively forcing them out of the pilot or compelling them to scale back their ambitions. “We see a clear mismatch between the regulatory framework and the market’s capacity to generate value,” said a senior representative from Nasdaq. “The current limit not only curtails the ability of issuers to raise capital efficiently, but it also hampers the development of secondary‑market liquidity, which is essential for the long‑term success of tokenised securities.” Boerse Stuttgart echoed these concerns, highlighting that its own tokenisation platform, which aims to bring a wide range of assets—from equities to real‑estate tokens—onto a blockchain‑based ledger, has already attracted interest that would push the total issuance well beyond the imposed ceiling. “Our participants are eager to tokenise assets that collectively amount to several billions of euros,” the exchange’s chief executive noted.
“Restricting the pilot to €1 billion would mean turning away substantial investor demand and missing out on the efficiencies that tokenisation can deliver, such as faster settlement, lower transaction costs, and greater accessibility for smaller investors.” The coalition’s appeal is not merely a plea for more flexibility; it also contains concrete arguments about why a higher—or even unlimited—cap would benefit the EU’s broader financial ecosystem. First, a larger cap would enable a more representative sample of tokenisation use‑cases, ranging from small‑cap companies seeking new financing avenues to large institutions looking to diversify their asset pools.
This diversity, in turn, would provide regulators with richer data on how tokenised securities behave under different market conditions, facilitating the creation of a robust, evidence‑based regulatory framework. Second, the coalition points out that the EU risks falling behind other global jurisdictions that have adopted more permissive approaches to digital asset innovation. For instance, the United States, Singapore, and several Asian economies have already introduced regulatory sandboxes with higher thresholds, allowing their markets to attract significant capital inflows and to become hubs for fintech development. By maintaining a restrictive cap, the EU could inadvertently drive innovators to seek more favourable environments elsewhere, resulting in a loss of talent, investment, and competitive advantage.
Third, the coalition stresses the importance of liquidity for tokenised assets. A modest cap limits the number of tokens that can be issued, which in turn reduces the pool of tradable units on secondary markets. Low liquidity can deter institutional investors, who often require depth and resilience in the market to commit large sums. By raising the cap, the EU would foster a more vibrant secondary market, encouraging price discovery and reducing volatility—outcomes that align with the EU’s broader objectives of market stability and investor protection.
In response to these arguments, EU officials have indicated a willingness to engage with the coalition and to review the pilot’s parameters. A spokesperson from the European Commission’s Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG‑FIN) said that the commission is “open to assessing whether the current limit reflects the latest market developments and the objectives of the pilot.” The regulator also highlighted that any amendment would need to balance the desire for innovation with the imperative to safeguard financial stability and protect investors from potential risks associated with nascent technologies.
The coalition has proposed a phased approach to adjusting the cap. In the first phase, they suggest raising the limit to €5 billion, allowing a broader range of projects to participate while still keeping the overall exposure within a manageable scope for regulators. In a second, longer‑term phase, they advocate for the removal of the cap altogether, coupled with enhanced reporting requirements and real‑time monitoring tools that leverage blockchain’s inherent transparency. Such tools could enable regulators to track token issuance, ownership transfers, and market activity in near‑real‑time, thereby mitigating concerns about systemic risk.
Beyond the immediate regulatory considerations, the coalition also highlighted the broader economic benefits that a more permissive tokenisation regime could unlock. Tokenisation can democratise access to capital markets by fractionalising high‑value assets, making it possible for retail investors to purchase small slices of traditionally illiquid assets like commercial real estate, fine art, or private equity stakes. This democratization can spur greater financial inclusion, stimulate entrepreneurship, and promote a more efficient allocation of capital across the EU.
Moreover, the technological infrastructure required for tokenisation—such as distributed ledger platforms, smart‑contract execution environments, and digital identity solutions—has spill‑over effects that can enhance the overall competitiveness of the EU’s fintech sector. By encouraging larger‑scale pilots, the EU would create a testing ground for these technologies, fostering innovation that could be exported to other industries, from supply‑chain management to voting systems.
In summary, the coalition’s request to the EU to either remove or substantially increase the €1 billion cap on tokenisation projects reflects a convergence of practical market realities, competitive pressures, and strategic ambitions for the European financial ecosystem. While regulators must remain vigilant to the risks inherent in emerging technologies, a calibrated relaxation of the cap—supported by robust oversight mechanisms—could accelerate the development of a vibrant, inclusive, and technologically advanced market for tokenised assets. The ongoing dialogue between industry participants and EU authorities will likely shape the future trajectory of digital securities in Europe, determining whether the region can position itself as a leader in the next wave of financial innovation.