In a coordinated effort that underscores the growing significance of digital asset infrastructure across Europe, a coalition of leading financial market participants—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and a number of other prominent exchanges and service providers—has formally petitioned the European Union to either lift the existing ceiling on tokenised securities or substantially increase it. The request comes amid mounting evidence that the current regulatory limit, which caps the total value of assets that can be issued in tokenised form under the EU’s pilot framework, is quickly becoming a bottleneck for innovation and for projects that are already operating at a scale that exceeds the prescribed threshold.
The coalition’s letter, addressed to the European Commission and the European Parliament’s Committee on Economic and Monetary Affairs, outlines a series of practical concerns that stem directly from the cap’s restrictive nature. First and foremost, the signatories argue that the ceiling—set at a modest figure relative to the size of many modern financial markets—prevents a number of high‑profile tokenisation initiatives from fully deploying their technology. Several pilot projects that have already been approved under the EU’s Tokenised Securities Pilot Regime (TSR) have reached, or are on track to exceed, the current limit, thereby forcing them to either scale back their ambitions or seek costly workarounds.
Among the examples cited are cross‑border bond issuances that aim to leverage blockchain’s ability to provide near‑real‑time settlement and enhanced transparency. In one case, a consortium of German and French banks is preparing a €1.2 billion green bond that would be partially tokenised to attract a broader base of retail investors. Under the present cap, only a fraction of the issuance could be represented on a distributed ledger, undermining the very purpose of the tokenisation experiment.
Similar constraints are affecting equity tokenisation projects that seek to democratise access to private‑company shares, as well as tokenised derivatives platforms that rely on high‑frequency data feeds to function efficiently. The coalition emphasizes that the cap not only hampers individual projects but also sends a discouraging signal to the broader ecosystem of fintech innovators, custodians, and legal service providers that are building the necessary infrastructure for a thriving tokenised market.
By limiting the total value of assets that can be placed on-chain, the EU inadvertently creates a competitive disadvantage when compared with jurisdictions such as the United States, Singapore, and Switzerland, where regulatory frameworks are more permissive and where tokenised securities have already attracted multi‑billion‑dollar volumes. In addition to the practical limitations, the signatories highlight a series of strategic considerations. The EU has positioned itself as a global leader in sustainable finance and digital transformation; however, the tokenisation cap runs counter to those ambitions.
By restricting the scale at which tokenised assets can be issued, the EU risks missing out on the efficiency gains, cost reductions, and liquidity improvements that blockchain‑based securities can deliver. Moreover, the cap could slow down the EU’s efforts to meet its climate‑related financing targets, as tokenised green bonds have the potential to channel capital more swiftly to environmentally focused projects. To address these concerns, the coalition proposes two possible pathways.
The first is a straightforward removal of the cap, allowing the pilot regime to operate without a predefined ceiling and enabling projects to scale in line with market demand. The second, for policymakers who may wish to retain some form of oversight, is to raise the cap to a level that reflects the realistic size of the European tokenised securities market—suggesting a figure in the range of €10 billion to €20 billion, based on projected issuance volumes for the next five years. The letter includes a detailed quantitative analysis that projects tokenised issuance growth under both scenarios, demonstrating that a higher cap would not only accommodate existing projects but also stimulate new entrants, thereby expanding the overall market. The coalition also offers to collaborate with regulators in developing a robust supervisory framework that balances investor protection with innovation.
They propose the establishment of a joint advisory board comprising regulators, market participants, and technology experts to monitor the pilot’s progress, assess systemic risk, and recommend adjustments to the regulatory parameters as needed. Such a collaborative approach, they argue, would ensure that any increase or removal of the cap is accompanied by appropriate safeguards, including AML/KYC compliance, transparent reporting standards, and clear dispute‑resolution mechanisms. The broader industry reaction to the coalition’s request has been largely supportive. Several fintech associations have issued statements echoing the sentiment that the cap is out of step with the rapid evolution of digital finance.
Meanwhile, consumer advocacy groups have called for a balanced approach that safeguards retail investors while still allowing the market to mature. In conclusion, the coalition’s appeal to the EU represents a pivotal moment for the continent’s digital securities agenda. By either lifting the existing tokenisation cap or raising it to a level that reflects realistic market dynamics, the EU can unlock significant economic benefits, foster innovation, and reinforce its position as a forward‑looking financial hub. The outcome of this request will likely shape the trajectory of tokenised finance in Europe for years to come, influencing everything from capital‑raising strategies of corporations to the everyday investment options available to individual savers.