In recent weeks, a coalition of leading financial market participants—including Nasdaq, Germany’s Boerse Stuttgart, and a number of other prominent exchanges and industry groups—has formally appealed to European Union regulators to either remove the existing ceiling on tokenised assets or to raise it substantially. The request stems from growing concerns that the current cap, which limits the total value of assets that can be tokenised within the EU’s experimental framework, is too restrictive and threatens to stifle innovation in a sector that is rapidly gaining momentum worldwide.
The tokenisation trial, launched by the European Commission as part of its broader Digital Finance Strategy, was designed to test the feasibility of issuing, trading, and settling digital representations of real‑world assets on distributed ledger technology (DLT) platforms. The pilot aims to demonstrate how blockchain‑based securities can improve market efficiency, reduce settlement times, lower transaction costs, and increase accessibility for a broader range of investors.
While the trial has attracted considerable interest, the regulatory ceiling—set at a modest €1 billion for the aggregate value of tokenised instruments—has become a point of contention. Nasdaq, a global leader in securities exchange services, has been particularly vocal.
In a recent statement, the company highlighted that its own tokenisation initiatives, which include pilot projects for equities, debt instruments, and even real‑estate assets, have already approached the cap. Nasdaq’s chief digital officer explained that the current limit forces the firm to prioritize a narrow set of use cases, thereby preventing a more comprehensive exploration of the technology’s potential. "We see tremendous demand from issuers who want to experiment with tokenised securities," the officer said.
"The €1 billion ceiling is simply not aligned with the scale of interest we are witnessing across Europe and beyond." Boerse Stuttgart, Europe’s largest digital asset exchange, echoed similar sentiments. The German exchange has been actively developing a suite of tokenised products, ranging from fractional shares of blue‑chip stocks to tokenised commodities such as gold and oil. In its view, the cap not only limits the volume of assets that can be issued but also hampers the ability to create a diversified portfolio of tokenised securities that could attract institutional investors. "Our goal is to build a vibrant ecosystem where issuers, investors, and service providers can interact seamlessly," said a senior executive at Boerse Stuttgart.
"A higher cap—or ideally no cap at all—would give us the flexibility to scale our offerings and to demonstrate the true benefits of tokenisation to the market." Beyond individual exchanges, the coalition includes several fintech firms, custodians, and legal service providers who collectively argue that the cap undermines the EU’s ambition to become a global hub for digital finance. They point out that other jurisdictions, notably the United States, Singapore, and Switzerland, have adopted more permissive approaches, allowing tokenisation projects to operate at much larger scales.
This, they claim, puts European innovators at a competitive disadvantage and could drive talent and capital away from the region. The coalition’s formal letter to the European Commission outlines three main arguments for raising or removing the cap: 1. **Existing Projects Already Exceed the Limit**: Several pilot programmes, already approved under the current framework, have reached or surpassed the €1 billion threshold. These include cross‑border tokenised bond issuances and large‑scale tokenised real‑estate funds.
The letter cites specific examples where the cap forced issuers to truncate their offerings, thereby limiting the data and insights that could be gathered from a full‑scale deployment. 2. **Innovation Stifling**: A restrictive ceiling discourages experimentation with more complex or higher‑value assets, such as tokenised infrastructure projects, large‑cap equities, or syndicated loans.
The coalition argues that without the ability to test these larger‑scale use cases, regulators will lack the empirical evidence needed to craft informed, proportionate rules for the broader market. 3. **Global Competitiveness**: By maintaining a low cap, the EU risks falling behind other leading financial centres that are actively promoting large‑scale tokenisation. The coalition warns that this could result in a loss of market share, reduced foreign investment, and a slower adoption of blockchain‑based financial services across Europe.
In response, EU officials have acknowledged the concerns but emphasize the need for a cautious approach. A senior adviser at the European Commission’s Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) noted that the cap was originally intended as a risk‑mitigation measure, allowing regulators to monitor the technology in a controlled environment before opening the door to larger volumes. "We are listening to the industry’s feedback and will assess whether the current threshold remains appropriate," the adviser said.
"Our priority is to ensure investor protection and market integrity while fostering innovation." The debate is expected to continue through the summer, with a formal review of the tokenisation pilot scheduled for the fourth quarter of the year. Industry participants hope that the outcome will reflect a more balanced approach—one that safeguards participants while providing enough leeway for meaningful experimentation.
If the cap is lifted or increased, it could unlock a wave of new tokenised products, ranging from fractional ownership of high‑value assets like artwork and luxury real estate to tokenised versions of traditional financial instruments such as corporate bonds and structured products. In the meantime, Nasdaq and Boerse Stuttgart have indicated that they will continue to run their existing pilots within the current limits, while simultaneously preparing for a scenario where the regulatory environment becomes more permissive. Both organisations are investing in the necessary infrastructure, including robust custody solutions, compliance tools, and investor education programmes, to ensure that when the cap is adjusted, the market can scale quickly and responsibly. Overall, the coalition’s request highlights a pivotal moment for European digital finance.
The outcome will not only affect the immediate participants in the tokenisation trial but could also set a precedent for how the EU balances innovation with regulation in the broader blockchain ecosystem. Stakeholders across the continent are watching closely, aware that the decision could shape the trajectory of tokenised securities and the future of capital markets in Europe for years to come.