In recent weeks, a coalition of prominent market participants—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and a number of other financial institutions—has formally appealed to European Union regulators to either eliminate the current ceiling on tokenised assets within the EU’s experimental tokenisation framework or, at a minimum, raise it substantially. The request stems from growing concerns that the existing cap, set at a modest level to test the nascent technology, is now acting as a bottleneck for projects that have already demonstrated the viability and demand for larger‑scale tokenised securities. The tokenisation pilot, launched by the European Commission as part of its broader digital finance strategy, was designed to assess the practical implications of issuing, trading, and settling tokenised assets on distributed ledger technology (DLT) platforms. To mitigate risk while gathering data, the pilot introduced a quantitative limit on the total market value of assets that could be tokenised under the experimental regime.
This limit was intended to be temporary, allowing regulators to observe market behaviour, address potential consumer‑protection issues, and fine‑tune the regulatory approach before any permanent rules were adopted. However, as the pilot progressed, several participants reported that the cap quickly became a constraint. Nasdaq, a global leader in market infrastructure, highlighted that its ongoing projects in Europe—particularly those involving tokenised equities and debt instruments—have already approached, and in some cases exceeded, the permitted threshold. Similarly, Börse Stuttgart, which has been at the forefront of integrating blockchain solutions into traditional exchange services, noted that its tokenised bond offerings and digital twin securities have attracted significant investor interest, pushing the aggregate tokenised value beyond the current ceiling.
The coalition’s letter to the European Commission underscores three main arguments for raising or removing the cap. First, the cap limits the ability of innovators to scale their solutions, thereby stifling the development of a truly competitive market for tokenised assets.
Second, the artificial ceiling creates a fragmented market environment where only small‑scale pilots can operate, preventing the collection of robust data on liquidity, price discovery, and systemic risk that would be more representative of a fully operational market. Third, the cap undermines the EU’s strategic goal of positioning Europe as a leader in digital finance, especially when other jurisdictions—such as the United States and several Asian economies—are rapidly advancing their own tokenisation frameworks with fewer restrictions. In addition to these strategic considerations, the coalition points to concrete examples of projects that have already outgrown the cap.
One notable case involves a cross‑border tokenised corporate bond issuance that, after initial investor appetite was gauged, saw demand surge to a level that would double the current limit. Another example is a tokenised equity offering for a mid‑size European tech firm, where the tokenised market cap quickly rose to several hundred million euros, again breaching the experimental ceiling. Beyond the immediate operational challenges, the coalition also raises concerns about the potential reputational impact on the EU’s digital finance ecosystem.
If innovators are forced to halt or downsize projects due to regulatory caps, they may seek more accommodating environments elsewhere, leading to a brain‑drain of talent and capital. Moreover, investors looking for exposure to tokenised assets could be diverted to non‑EU platforms, diminishing the EU’s ability to capture the economic benefits associated with the emerging asset class.
To address these issues, the coalition proposes a phased approach. In the short term, they recommend an immediate increase of the cap to a level that reflects the current aggregate value of tokenised projects under the pilot—estimated at roughly €1.5 billion, compared with the present limit of €500 million. In the medium term, they suggest establishing a flexible, data‑driven mechanism that would allow the cap to be adjusted periodically based on market metrics such as total tokenised volume, liquidity measures, and risk assessments. Finally, in the long run, the coalition envisions the removal of the cap altogether once sufficient supervisory tools and safeguards are in place, thereby enabling a fully open market for tokenised securities across the EU.
Regulators have responded positively to the dialogue, acknowledging that the pilot’s original parameters were deliberately conservative. A senior official from the European Commission’s Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) indicated that the Commission is reviewing the feedback and will present a revised proposal in the coming months. The official emphasized that any adjustment would be grounded in empirical evidence gathered from the pilot, ensuring that investor protection and market integrity remain paramount.
In conclusion, the request from Nasdaq, Börse Stuttgart, and their partners reflects a broader sentiment within the European fintech community: that the tokenisation pilot, while valuable as a proof‑of‑concept, must evolve to accommodate the rapid growth and sophistication of real‑world use cases. By lifting or raising the cap, the EU would not only alleviate immediate operational constraints but also signal its commitment to fostering innovation, attracting investment, and establishing a world‑class digital finance market. The outcome of this dialogue will likely shape the trajectory of tokenised assets in Europe for years to come, influencing everything from regulatory design to the competitive positioning of European exchanges on the global stage.