In a coordinated effort, a group of prominent financial market participants—including Nasdaq, the Stuttgart Stock Exchange (Boerse Stuttgart), and a number of other leading institutions—has formally appealed to European Union regulators to either remove the existing ceiling on tokenisation activities or, at the very least, raise it to a level that reflects the rapid growth and evolving nature of the digital asset ecosystem. The coalition’s position is grounded in a detailed analysis of current market conditions, the trajectory of tokenised asset projects across the continent, and the practical challenges that a low cap imposes on innovation, liquidity, and competitiveness. The request comes at a time when the EU is experimenting with a regulatory sandbox for tokenisation, a framework designed to allow market participants to test new models for issuing, trading, and settling tokenised securities under a controlled set of rules. While the sandbox is intended to foster innovation, the coalition argues that the preset limit—currently set at a modest figure that was appropriate for early‑stage pilots—has become a bottleneck.
Several ongoing European tokenisation projects have already reached, or are projected to exceed, the cap, forcing them to either halt expansion or seek costly work‑arounds that undermine the very purpose of the sandbox. According to the coalition’s statement, the existing cap was originally established to mitigate risk while regulators gathered data on how tokenised assets behave in a regulated environment. However, the market has matured far more quickly than anticipated. Projects ranging from tokenised real‑estate funds in Germany to blockchain‑based corporate bond issuances in France have demonstrated that the technology can handle volumes far beyond the original assumptions.
In some cases, the tokenised instruments have attracted institutional investors, whose participation brings both credibility and substantial capital. By restricting the total value of tokenised assets that can be processed within the sandbox, the cap inadvertently limits the ability of these projects to scale, potentially pushing them out of the EU’s jurisdiction and into more permissive markets elsewhere. The coalition’s appeal is not merely a plea for deregulation; it is a carefully reasoned argument that a higher cap—or the removal of the cap altogether—would align the regulatory environment with the realities of a market that is already demonstrating robust demand and operational resilience.
They point out that the EU’s broader strategic goals—such as establishing a leading position in the global digital finance arena, enhancing cross‑border capital flows, and supporting sustainable investment—are best served by a regulatory framework that can accommodate growth rather than constrain it. In addition to the economic rationale, the coalition highlights several practical benefits that would arise from lifting the cap. First, a higher limit would enable tokenisation pilots to achieve economies of scale, reducing per‑transaction costs and making tokenised assets more attractive to a wider range of investors, including retail participants. Second, it would provide regulators with richer data sets, as larger volumes of tokenised transactions would generate more comprehensive insights into market dynamics, risk patterns, and compliance challenges.
This, in turn, would facilitate the development of more nuanced and effective supervisory tools. Third, removing the cap would encourage collaboration among EU member states, fostering a more integrated market for digital assets that could serve as a model for other jurisdictions. The coalition also addresses potential concerns about risk.
They acknowledge that a higher cap could increase exposure to market volatility and operational failures, but they argue that these risks can be mitigated through robust governance frameworks, enhanced transparency requirements, and the use of advanced monitoring technologies such as real‑time analytics and automated compliance checks. Moreover, the coalition stresses that the sandbox already imposes stringent eligibility criteria, ongoing supervision, and reporting obligations, which together form a strong safety net. To illustrate the tangible impact of the current limit, the coalition cites specific examples. One German project, which tokenises fractional ownership in commercial real‑estate, has already attracted €150 million in investor commitments, surpassing the sandbox’s €100 million cap.
Rather than being able to continue scaling, the project must now pause additional issuance, potentially delaying construction timelines and reducing expected returns for early investors. In France, a fintech firm that issued tokenised green bonds reached the cap within six months, forcing the company to seek a separate regulatory pathway that could delay the rollout of its sustainability‑focused financing solution. By presenting these case studies, the coalition underscores that the cap is not a theoretical constraint but a real‑world obstacle that can hinder the deployment of innovative financial products that align with the EU’s policy objectives, such as green finance and digital transformation.
The coalition’s request to the European Commission and the European Securities and Markets Authority (ESMA) includes a set of concrete recommendations. They propose a phased approach: initially raising the cap to a level that accommodates the current pipeline of projects, followed by periodic reviews tied to measurable market indicators such as total tokenised asset volume, number of active participants, and incidence of compliance breaches. They also suggest the creation of a dedicated advisory board comprising industry experts, regulators, and consumer representatives to monitor the impact of any cap adjustments and to recommend further refinements. In conclusion, Nasdaq, Boerse Stuttgart, and their partners are urging EU policymakers to recognize that the tokenisation sandbox is no longer a nascent testing ground but a vibrant arena where significant capital is already being mobilised.
By adjusting the cap—either by raising it substantially or by removing it altogether—the EU can unlock the full potential of tokenised assets, strengthen its position as a leader in digital finance, and deliver tangible benefits to investors, issuers, and the broader economy. The coalition remains open to ongoing dialogue with regulators, emphasizing a collaborative approach that balances innovation with prudent risk management, and they stand ready to provide the data and expertise needed to support any regulatory evolution.