In a coordinated effort to influence European regulatory policy, a group of prominent financial institutions—including Nasdaq, Germany’s Boerse Stuttgart, and a number of other market participants—have formally requested that the European Union reconsider the current limitations imposed on its tokenisation trial. The coalition’s position is clear: the existing cap on the amount of assets that can be tokenised under the pilot scheme is far too restrictive, and it hampers the ability of innovators to fully explore the benefits of digital securities.
The request was submitted to the European Commission and the European Parliament as part of an ongoing dialogue about how best to foster a competitive, secure, and transparent market for tokenised assets. The signatories argue that the cap, which was originally set as a precautionary measure to monitor risk and ensure consumer protection, now acts as a bottleneck that stifles growth.
They point to several ongoing projects across the continent that have already reached, or are projected to exceed, the current threshold, illustrating that the market’s natural trajectory is outpacing the regulatory framework. Tokenisation, the process of converting real‑world assets—such as equities, bonds, real estate, or commodities—into digital tokens on a blockchain, promises a range of advantages. These include increased liquidity, fractional ownership, faster settlement times, and reduced transaction costs.
By creating a digital representation of an asset, tokenisation can open up investment opportunities to a broader audience, democratise access to capital markets, and enhance the efficiency of post‑trade processes. However, these benefits can only be realised if the regulatory environment supports sufficient scale and flexibility. Nasdaq, a global leader in exchange services, highlighted that its own pilot projects involving tokenised securities have already hit the ceiling imposed by the EU’s current cap.
The exchange’s representatives noted that the limitation not only curtails the volume of tokens that can be issued but also discourages other market participants from entering the space due to uncertainty about future scalability. Boerse Stuttgart echoed these concerns, emphasizing that German and broader European issuers are eager to test larger‑scale tokenisation models that could serve as benchmarks for the rest of the world. The coalition’s letter also references specific case studies. For example, a cross‑border bond issuance that leverages token technology to streamline compliance and settlement has already attracted interest from institutional investors in France, Italy, and Spain.
The project’s initial tranche alone would have surpassed the cap if the current limits were applied strictly. Similarly, a real‑estate tokenisation platform operating out of the Netherlands has secured commitments for a portfolio worth several hundred million euros, a figure that again exceeds the existing threshold. Beyond the immediate financial implications, the coalition argues that maintaining a low cap could undermine Europe’s strategic goal of becoming a global hub for digital finance. Other jurisdictions, notably the United States and certain Asian economies, are actively revising their regulatory approaches to accommodate larger‑scale tokenisation pilots.
If the EU remains constrained, it risks losing talent, innovation, and capital to these more permissive environments. In response to these concerns, the coalition proposes two possible pathways for the EU: 1.
**Remove the cap entirely** – This would allow market participants to determine the appropriate scale for each tokenisation project based on risk assessments and investor demand, fostering a more organic growth trajectory. 2. **Raise the cap to a higher, more realistic level** – If a complete removal is deemed too risky, the coalition suggests a calibrated increase that reflects the current size of European tokenisation initiatives, perhaps accompanied by periodic reviews to adjust the limit as the market matures.
Both options are presented with the caveat that robust supervisory mechanisms remain in place. The coalition stresses that enhanced transparency, rigorous AML/KYC procedures, and clear reporting standards are essential to mitigate systemic risk, regardless of the cap’s size. They propose that the EU could implement a tiered supervision model, where larger tokenisation projects are subject to additional oversight, while smaller pilots continue under the existing framework.
The broader regulatory context includes the EU’s MiCA (Markets in Crypto‑Assets) framework, which aims to provide a comprehensive set of rules for crypto‑related activities. While MiCA addresses many aspects of digital assets, the tokenisation pilot operates under a separate sandbox arrangement that allows for experimental approaches. Aligning the pilot’s parameters with MiCA’s overarching objectives is a key consideration for policymakers. Stakeholders outside the immediate coalition have also weighed in.
Consumer advocacy groups caution that any increase in scale must be matched with strong investor protection measures, particularly for retail participants who may be less familiar with the nuances of tokenised securities. Meanwhile, fintech startups argue that a higher cap would unlock new business models, such as token‑based supply‑chain financing and micro‑investment platforms, which could drive economic inclusion. In summary, the coalition of Nasdaq, Boerse Stuttgart, and other market actors is urging the European Union to either lift the current tokenisation cap or raise it to a level that reflects the real‑world demand and progress of ongoing projects. Their argument is grounded in concrete examples of initiatives that have already outgrown the limit, as well as a strategic vision for Europe to remain at the forefront of digital finance innovation.
By adjusting the cap, the EU could enable more ambitious tokenisation experiments, attract global capital, and reinforce its position as a leader in the emerging digital asset ecosystem, all while maintaining the necessary safeguards to protect investors and preserve market integrity.