In recent weeks, a coalition of prominent market participants—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and a number of other leading financial institutions—has formally appealed to European Union regulators to either remove the existing ceiling on tokenisation projects or, at a minimum, raise it to a level that reflects the rapid growth and expanding scope of digital asset initiatives across the continent. This collective request stems from a growing consensus among industry stakeholders that the current cap, which was introduced as a precautionary measure during the early stages of the EU’s tokenisation framework, now hampers innovation and limits the ability of firms to fully exploit the benefits of blockchain‑based securities. The coalition’s letter, addressed to the European Commission and the European Securities and Markets Authority (ESMA), outlines several key arguments in support of its position.
First, it points out that the original limit was set based on assumptions about market size and adoption rates that have since proven to be overly conservative. When the tokenisation pilot was launched, regulators anticipated a modest uptake, expecting only a handful of projects to test the new infrastructure. In reality, the landscape has evolved dramatically: dozens of pilot programmes are now operational, and a number of them have already exceeded the prescribed thresholds for token issuance volume and market participation. One of the coalition’s primary concerns is that the cap creates a “regulatory bottleneck” that forces innovative firms to either scale back their ambitions or seek alternative jurisdictions with more flexible rules.
This, the letter argues, not only undermines the EU’s ambition to become a global hub for digital finance but also risks diverting capital and talent to competing markets such as the United States, Singapore, or the United Arab Emirates, where regulators have adopted a more progressive stance toward tokenised assets. By maintaining a restrictive ceiling, the EU could inadvertently cede its competitive edge in a sector that is projected to attract trillions of euros in investment over the next decade. The coalition also highlights concrete examples of projects that have already outgrown the current limit. For instance, a cross‑border tokenisation initiative involving several major European banks has successfully issued tokenised corporate bonds with a total face value that exceeds the cap by a significant margin.
Similarly, a consortium of fintech firms working on tokenised real‑estate assets has reported demand that far surpasses the allowed issuance volume, prompting them to pause further development until regulatory clarity is achieved. These cases illustrate that the cap is not merely a theoretical constraint; it has tangible, adverse effects on ongoing commercial activities. Beyond the immediate impact on individual projects, the coalition emphasizes broader systemic benefits that could be unlocked by lifting or raising the cap. A higher limit would enable larger, more liquid tokenised markets, fostering greater price discovery and reducing transaction costs for investors.
It would also facilitate the integration of tokenised securities into existing clearing and settlement infrastructures, thereby enhancing operational efficiency and reducing settlement risk. Moreover, a more expansive tokenisation regime could accelerate the adoption of innovative financial products such as fractional ownership of high‑value assets, programmable securities with embedded smart‑contract functionality, and automated compliance mechanisms that streamline regulatory reporting. In its appeal, the coalition proposes a phased approach to adjusting the cap.
Rather than an abrupt removal, it suggests a graduated increase that aligns with measurable milestones, such as the number of active tokenised issuers, total market capitalization of tokenised assets, and demonstrated compliance with anti‑money‑laundering (AML) and know‑your‑customer (KYC) standards. This incremental strategy would provide regulators with the data needed to monitor market dynamics while granting issuers the flexibility to scale their operations responsibly. The coalition also calls for greater regulatory dialogue and collaboration.
It urges EU authorities to establish a dedicated working group that includes representatives from exchanges, asset managers, technology providers, and consumer‑protection agencies. Such a forum would serve as a conduit for sharing best practices, addressing emerging risks, and ensuring that any adjustments to the cap are grounded in a comprehensive understanding of market realities.
In response to the coalition’s letter, several EU officials have acknowledged the concerns raised and indicated a willingness to review the existing framework. A spokesperson from the European Commission noted that the tokenisation pilot is intended to be a learning exercise and that regulators are open to “calibrating” the parameters as the market matures.
ESMA has similarly signalled that it will conduct a thorough impact assessment before making any formal amendments to the cap. Nevertheless, industry observers caution that the regulatory process can be lengthy, and they stress the importance of timely action.
They argue that the window of opportunity for the EU to position itself at the forefront of tokenised finance is narrowing, especially as other jurisdictions roll out more permissive regimes and attract a growing share of global investment. Promptly revising the cap, they contend, would send a clear message to market participants that the EU is committed to fostering innovation while maintaining robust investor protection. In summary, the coalition led by Nasdaq, Börse Stuttgart and other key players is urging the European Union to reconsider the current tokenisation cap, either by removing it altogether or by raising it to a level that reflects the actual scale and ambition of ongoing projects.
The coalition’s arguments are anchored in concrete examples of projects that have already outstripped the limit, the desire to maintain the EU’s competitive position in the global digital‑asset arena, and the broader economic benefits that a larger tokenised market could deliver. As the dialogue between industry and regulators continues, the outcome of this request will likely shape the trajectory of tokenised securities and digital finance across Europe for years to come.