In recent weeks, a coalition of prominent market participants—including Nasdaq, Germany’s Boerse Stuttgart, and a number of other leading exchanges and financial technology firms—has formally appealed to European Union regulators to either eliminate or substantially raise the cap that currently limits the scope of tokenisation projects under the EU’s experimental framework. The request stems from growing concerns that the existing ceiling, which was introduced as a safeguard while the EU tests the viability of digital asset tokenisation, is now acting as a bottleneck for innovation and for the scaling of projects that have already demonstrated significant market traction. The tokenisation cap, set at a modest €100 million in total transaction value for each pilot, was originally designed to ensure that any potential systemic risks could be closely monitored during the early stages of the EU’s foray into blockchain‑based securities and other digital assets.
However, as the market has matured, participants argue that the ceiling no longer reflects the realities of contemporary digital finance. In particular, several ongoing European tokenisation initiatives—ranging from real‑estate token offerings to fractionalised ownership of infrastructure assets—have already reached transaction volumes that exceed the prescribed limit, forcing them either to halt further fundraising or to seek alternative, less regulated jurisdictions.
Nasdaq, a global leader in exchange services and market technology, highlighted that the cap hampers its ability to bring innovative token‑based products to European investors. In a statement released to the press, the company explained that its pilot programmes, which aim to digitise a variety of traditional securities, have quickly outgrown the €100 million threshold.
"We see a clear demand from issuers and investors for more flexible, scalable tokenisation solutions," the statement read. "The current limit not only restricts the growth of our pilots but also puts European issuers at a competitive disadvantage compared to markets such as the United States and Singapore, where regulatory frameworks are more accommodating." Similarly, Boerse Stuttgart, Germany’s second‑largest stock exchange, echoed these concerns.
The exchange has been actively developing a suite of tokenised products, including digital representations of equities, bonds, and even commodities. Its Chief Digital Officer noted that the cap has forced the exchange to fragment larger offerings into multiple smaller pilots, thereby increasing operational complexity and driving up costs for both issuers and investors.
"Our goal is to provide a seamless, efficient pathway for companies to raise capital through tokenisation," he said. "When the regulatory ceiling is set too low, we end up creating artificial barriers that defeat the purpose of the experiment." Beyond the immediate financial implications, the coalition argues that the cap also undermines the EU’s broader strategic objectives. The European Commission has repeatedly emphasised the importance of fostering a vibrant digital finance ecosystem to maintain the bloc’s competitiveness on the global stage.
By keeping the tokenisation limit artificially low, the EU risks ceding leadership to jurisdictions that have adopted more progressive approaches, potentially diverting capital, talent, and innovative projects away from Europe. In response to these concerns, the coalition has put forward several concrete proposals for the European Commission and the European Securities and Markets Authority (ESMA). First, they suggest removing the cap entirely for projects that meet robust risk‑management standards, including thorough AML/KYC procedures, transparent governance structures, and regular reporting to regulators.
Second, if a complete removal is deemed premature, they recommend raising the ceiling to at least €500 million, a figure that aligns more closely with the scale of existing tokenisation pilots and provides sufficient headroom for future growth. Finally, the coalition urges the creation of a tiered regulatory sandbox that would allow larger projects to operate under a slightly more stringent supervisory regime, while still preserving the flexibility needed for rapid innovation. Regulators have so far responded with cautious openness.
A senior official at ESMA acknowledged the rapid evolution of the market and the need to periodically reassess the parameters of the sandbox. "We designed the tokenisation pilot to be adaptable," the official said in a recent interview. "While the initial cap was appropriate at the outset, we recognise that the landscape has changed. We are currently reviewing the data and will consider adjustments that balance innovation with investor protection." Industry analysts generally view the coalition’s push as a logical next step.
Emma Johansson, a fintech analyst at MarketWatch Europe, noted that the tokenisation market in Europe has already surpassed €2 billion in cumulative issuance, far outstripping the pilot’s original expectations. "The EU’s early adoption of a sandbox was commendable, but the next phase requires scaling up," Johansson explained. "If the regulators are willing to adjust the cap, it will send a strong signal to the market that Europe is serious about becoming a hub for digital asset finance." The debate also touches on broader themes such as investor protection, market integrity, and the need for harmonised cross‑border rules.
Critics of raising the cap warn that larger tokenisation projects could expose investors to new forms of risk, especially if the underlying assets are illiquid or if the technology infrastructure is not yet fully resilient. To address these concerns, the coalition has pledged to work closely with regulators to develop enhanced disclosure standards, stress‑testing protocols, and real‑time monitoring tools that leverage blockchain’s inherent transparency. In summary, the request from Nasdaq, Boerse Stuttgart and their partners reflects a growing consensus that the EU’s tokenisation sandbox must evolve to keep pace with market realities. By either removing or substantially increasing the current €100 million limit, the EU could unlock a wave of new capital‑raising opportunities, spur technological innovation, and reinforce its position as a leader in the emerging digital finance arena.
The upcoming weeks will be crucial as regulators weigh the benefits of a more permissive framework against the imperative to safeguard market participants, ultimately shaping the future trajectory of tokenised securities across Europe.