In a coordinated effort, a group of leading market participants—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and a number of other prominent financial institutions—has formally appealed to the European Union to either eliminate the existing ceiling on tokenised assets or, at the very least, raise it to a level that reflects the rapid growth of the sector. The request comes as part of a broader dialogue on the EU’s tokenisation trial, a regulatory sandbox designed to test the feasibility, security, and market impact of converting traditional financial instruments into digital tokens on distributed ledger technology (DLT) platforms. The coalition’s letter to EU policymakers underscores a central concern: the current cap on the total value of assets that can be tokenised under the trial is far too restrictive.
According to the signatories, the limit—set at a modest €5 billion for the pilot—does not accommodate the scale of several ongoing European projects that have already exceeded this threshold. By imposing such a low ceiling, the EU risks stifling innovation, limiting liquidity, and discouraging market participants from fully exploring the potential efficiencies that tokenisation promises. Tokenisation, the process of representing real-world assets—such as equities, bonds, real estate, or commodities—as cryptographic tokens on a blockchain, has been hailed as a transformative technology for capital markets.
Proponents argue that it can dramatically reduce settlement times, cut operational costs, enhance transparency, and broaden access to investment opportunities for a wider pool of investors. Moreover, tokenised assets can be fractionally owned, enabling smaller investors to participate in markets that were previously out of reach due to high entry barriers. Within the EU, the tokenisation trial was launched to provide a controlled environment where regulators, issuers, and service providers could experiment with these new structures while ensuring that consumer protection, market integrity, and anti‑money‑laundering safeguards remain intact.
The trial is intended to gather data, identify best practices, and ultimately inform a comprehensive regulatory framework that balances innovation with risk mitigation. However, the coalition argues that the current quantitative limit hampers the trial’s ability to generate meaningful insights. Several pilot projects, particularly those involving large‑cap equities and sovereign debt instruments, have already approached or surpassed the €5 billion mark. For instance, a joint initiative between a major European bank and a fintech firm to tokenise a portfolio of blue‑chip stocks is projected to reach €7 billion in tokenised value within the first six months of operation.
Similarly, a cross‑border tokenisation effort focused on green bonds issued by multiple EU member states is expected to exceed the cap by a comfortable margin. By keeping the ceiling artificially low, the EU may inadvertently force participants to truncate their projects, split them into artificial sub‑segments, or abandon promising use cases altogether. This, the coalition warns, would lead to a fragmented data set that does not accurately reflect real‑world market dynamics, thereby limiting the usefulness of the trial’s findings for future policy decisions. In its appeal, the signatories propose two possible pathways for the EU: 1.
**Complete Removal of the Cap** – Eliminating the ceiling would allow tokenisation projects to scale organically, providing regulators with a full picture of how large‑scale tokenised markets behave, including stress‑testing scenarios, liquidity provision, and systemic risk considerations. 2. **Substantial Increase of the Cap** – If removal is deemed premature, the coalition suggests raising the limit to at least €20 billion, a figure that aligns more closely with the projected volume of tokenised assets across the pilot participants and offers sufficient headroom for future growth. The letter also highlights the competitive disadvantage the EU could face if it does not adjust its regulatory parameters.
Other jurisdictions, such as the United States, Singapore, and Switzerland, have adopted more flexible approaches, allowing tokenisation pilots to operate with higher caps or no caps at all. These regions are already attracting significant investment and talent, positioning themselves as hubs for digital asset innovation. The EU, by contrast, risks losing market share and the associated economic benefits if it remains overly cautious.
Beyond the immediate practicalities, the coalition stresses the strategic importance of tokenisation for the EU’s broader financial objectives. The European Commission’s Capital Markets Union (CMU) aims to create a more integrated and efficient capital market across member states. Tokenisation can serve as a cornerstone of this vision by facilitating cross‑border trading, reducing settlement friction, and enabling new forms of financing, such as token‑based crowdfunding for SMEs. A more permissive cap would therefore not only benefit the pilot participants but also advance the EU’s long‑term goal of a unified, digital‑first financial ecosystem.
In response, EU officials have indicated a willingness to review the cap, acknowledging the coalition’s concerns and the need for a data‑driven approach. However, they have also emphasized the importance of maintaining robust investor protection and ensuring that any increase does not compromise the trial’s risk‑management framework.
The dialogue is expected to continue over the coming weeks, with a formal decision anticipated before the trial’s scheduled conclusion in late 2025. In summary, Nasdaq, Börse Stuttgart, and their allied partners are urging the European Union to reconsider the tokenisation trial’s current monetary ceiling.
They argue that the existing limit is insufficient for capturing the true potential and challenges of large‑scale tokenised markets, and that a higher cap—or its outright removal—will provide richer data, foster innovation, and keep the EU competitive on the global stage. The outcome of this request will likely shape the future regulatory landscape for digital assets across Europe, influencing how quickly and effectively tokenisation can be integrated into mainstream financial markets.