In a coordinated effort that underscores the growing importance of digital assets in traditional finance, a coalition of leading market participants—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and a number of other prominent institutions—has formally petitioned the European Union to either eliminate the existing ceiling or substantially raise the limit that governs the tokenisation pilot programme currently being trialled across the bloc. The coalition’s appeal is grounded in the observation that the current cap, which was designed as a precautionary measure to contain risk while the regulatory framework for tokenised securities is still being refined, has become a bottleneck for several ambitious projects that are already operating at a scale that exceeds the permitted threshold. The tokenisation pilot, launched by the European Commission in early 2023, was intended to test the viability of issuing and trading tokenised securities—such as bonds, equities, and other financial instruments—on distributed ledger technology (DLT) platforms under a controlled environment.
To mitigate potential systemic risk and to allow regulators a manageable scope for oversight, the pilot imposed a maximum aggregate value of €1 billion for all tokenised assets issued under the scheme. While this figure was deemed appropriate at the outset, the rapid acceleration of digital asset adoption across Europe has rendered it increasingly restrictive. Nasdaq, a global leader in exchange services and market technology, highlighted that several of its pilot projects in collaboration with European partners have already reached, and in some cases surpassed, the €1 billion mark. In a statement released on behalf of the coalition, Nasdaq’s Chief Executive for Market Services noted, “Our experience over the past twelve months demonstrates that the market demand for tokenised securities is far beyond what the current cap permits.
By constraining the size of issuances, the cap inadvertently hampers innovation, limits liquidity, and reduces the potential benefits that tokenisation can bring to issuers and investors alike.” Börse Stuttgart, which has been at the forefront of integrating blockchain solutions into its trading infrastructure, echoed these concerns. The exchange’s Head of Digital Assets explained that the cap not only curtails the scale of existing projects but also discourages new entrants from exploring tokenisation as a viable financing route. “When the ceiling is set too low, it sends a signal that the regulatory environment is not fully supportive of large‑scale tokenised offerings. This can deter companies—especially mid‑size and large corporates—from considering tokenisation as a strategic option for capital raising,” the executive said.
Other members of the coalition, which includes several fintech firms, custodians, and asset managers, contributed additional perspectives. A leading European custodian stressed the operational challenges posed by the cap: “Our systems are built to handle high‑volume, high‑value tokenised transactions. When the regulatory limit forces us to segment issuances artificially, it creates unnecessary complexity, raises compliance costs, and can fragment the market.” An asset manager added that the cap hampers the creation of diversified tokenised investment products, which could otherwise provide investors with exposure to a broader range of assets and improve portfolio efficiency. The coalition’s request to the EU is two‑fold.
First, they ask for a removal of the cap altogether, arguing that a risk‑based supervisory approach—similar to the one applied to traditional securities—would be more appropriate as the market matures. Second, they propose a graduated increase in the limit, suggesting an interim ceiling of €5 billion, which would give regulators time to assess the impact of larger tokenised issuances while still providing sufficient headroom for market participants to scale their operations. In response, EU officials have acknowledged the feedback and indicated that they are reviewing the pilot’s parameters. A spokesperson for the European Commission’s Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) said, “We appreciate the constructive input from market participants.
The tokenisation pilot is a living framework, and we are committed to ensuring that it balances innovation with investor protection. Adjustments to the cap will be considered in light of the data we have collected and the evolving market landscape.” Analysts observing the situation note that the coalition’s push reflects a broader trend: the convergence of traditional finance and the digital asset ecosystem. As tokenisation gains traction, it promises to streamline settlement processes, reduce friction, and lower costs associated with issuing and trading securities. Moreover, tokenised assets can be programmed with smart‑contract functionality, enabling novel features such as automated dividend distribution, fractional ownership, and real‑time compliance checks.
However, regulators remain cautious. They are tasked with ensuring that the underlying technology is secure, that market participants adhere to anti‑money‑laundering (AML) and know‑your‑customer (KYC) requirements, and that systemic risk is contained. The current cap was initially introduced as a safeguard while these regulatory mechanisms were being calibrated. Critics of raising or removing the cap argue that a sudden expansion could outpace the development of necessary supervisory tools, potentially exposing investors to unforeseen risks.
To address these concerns, the coalition has offered to cooperate closely with regulators, proposing the establishment of a joint working group that would monitor the pilot’s performance, share data on transaction volumes, and develop best‑practice guidelines for risk management in tokenised markets. They also suggested pilot‑specific stress‑testing protocols to evaluate how larger tokenised issuances would behave under adverse market conditions. The dialogue between the coalition and EU authorities is expected to continue over the coming months, with a formal review of the pilot’s rules slated for early 2027. If the EU decides to raise or eliminate the cap, it could unlock a wave of new tokenised securities offerings, potentially positioning Europe as a leader in the emerging digital finance arena.
Conversely, maintaining a restrictive limit could slow the momentum of tokenisation projects and push innovators to seek more permissive jurisdictions elsewhere. In summary, Nasdaq, Börse Stuttgart, and their allied partners are urging the European Union to reconsider the €1 billion ceiling that currently governs the tokenisation pilot.
They argue that the limit is outdated given the rapid growth and sophistication of tokenised asset initiatives across the continent. By either removing the cap or raising it to a more realistic threshold, they believe the EU can foster a more vibrant, liquid, and innovative market for digital securities, while still safeguarding investors through a risk‑based regulatory approach. The outcome of this request will likely shape the trajectory of Europe’s digital asset ecosystem for years to come.