In a coordinated effort that underscores the growing significance of digital assets in traditional finance, a coalition of leading market participants—including Nasdaq, the Stuttgart Stock Exchange (Börse Stuttgart), and several other prominent institutions—has formally appealed to European Union regulators to either remove the existing ceiling on tokenisation projects or substantially increase it. The request stems from mounting evidence that the current cap, which was introduced as a precautionary measure during the EU’s experimental tokenisation regime, is increasingly out of step with the scale and ambition of real‑world projects already underway across the continent. The coalition’s letter, addressed to the European Commission and the European Securities and Markets Authority (ESMA), outlines a series of concrete arguments designed to persuade policymakers that the cap is no longer fit for purpose. First and foremost, the signatories point to a series of pilot programmes that have already exceeded the stipulated limit, thereby demonstrating that market participants are eager to push the boundaries of what tokenised assets can achieve.
These pilots span a diverse array of asset classes, from tokenised equities and corporate bonds to real‑estate shares and even fractional ownership of infrastructure projects. In each case, the participants argue, the imposed ceiling hampers the ability to fully test the technology at a scale that mirrors mainstream market conditions. One of the most illustrative examples highlighted in the appeal is a joint venture between Nasdaq and several European banks to create a tokenised version of a mid‑cap corporate bond issuance. The pilot, which initially aimed to issue tokens representing €50 million of debt, quickly attracted interest from institutional investors who sought to allocate larger sums.
Within weeks, demand surged beyond the EU‑imposed cap, forcing the consortium to truncate the offering and limiting the data that could be gathered on liquidity, settlement speed, and investor behaviour in a tokenised environment. The coalition argues that such a scenario not only curtails innovation but also deprives regulators of valuable insights that could inform future policy. Similarly, Börse Stuttgart has been at the forefront of tokenising small‑ and medium‑sized enterprise (SME) shares, a segment that traditionally suffers from limited access to capital markets. Their pilot programme, designed to democratise investment by allowing retail investors to purchase fractional shares via blockchain‑based tokens, quickly outgrew the cap.
The exchange reports that the demand from both retail and professional investors was strong enough to warrant a token issuance well beyond the current ceiling, prompting the need to pause the pilot until regulatory clarity could be obtained. Beyond these specific cases, the coalition emphasizes broader market trends that reinforce the need for a more flexible framework. According to recent data from the European Blockchain Partnership, the volume of tokenised assets under management across the EU has grown at a compound annual growth rate of roughly 45 % over the past two years.
This rapid expansion is being driven by a confluence of factors, including heightened investor appetite for digital assets, advances in distributed ledger technology that reduce settlement times and costs, and a growing regulatory consensus that tokenisation can enhance market efficiency and transparency. The coalition also stresses that the EU’s tokenisation cap creates an uneven playing field when compared with jurisdictions such as the United States, Singapore, and Switzerland, where regulatory sandboxes allow for larger‑scale experiments. By maintaining a restrictive ceiling, the EU risks losing its competitive edge in a sector that could become a cornerstone of future capital markets.
The signatories argue that a revised cap—or the removal of the cap altogether—would align the EU’s approach with global best practices, attract more innovative firms to set up operations in Europe, and ultimately generate economic benefits in the form of new jobs, tax revenues, and increased financial inclusion. From a risk‑management perspective, the coalition acknowledges that safeguards are essential, but contends that the current cap is a blunt instrument that does not differentiate between low‑risk tokenised securities and higher‑risk experimental assets. They propose a tiered approach, where the ceiling is linked to the risk profile and maturity of the underlying assets, coupled with robust reporting requirements and real‑time monitoring via supervisory technology (SupTech).
Such a framework would preserve investor protection while granting market participants the flexibility needed to scale successful pilots. In concluding their appeal, the coalition calls on EU authorities to act swiftly, citing the urgency of not letting the regulatory environment stifle the momentum that has built up over the past several years. They propose a concrete timeline: an initial review of the cap within the next three months, followed by a public consultation and a final decision within six months.
The signatories also offer to collaborate closely with regulators throughout the process, providing data, technical expertise, and real‑world case studies to inform any adjustments. The request has already sparked a lively debate among policymakers, industry observers, and consumer advocacy groups.
While some regulators express concern about potential systemic risks associated with larger tokenised offerings, many acknowledge that the benefits of a well‑regulated, scalable tokenisation ecosystem could far outweigh the downsides. As the EU continues to shape its digital finance strategy, the outcome of this appeal could set a precedent for how traditional financial markets integrate blockchain technology and could determine whether Europe emerges as a leader or a laggard in the next wave of financial innovation. In summary, Nasdaq, Börse Stuttgart, and their allied partners are urging the European Union to revisit the tokenisation cap that currently limits the size of experimental projects. Their argument is anchored in concrete evidence of demand exceeding the cap, a rapidly expanding market for tokenised assets, and the strategic imperative to stay competitive on a global stage.
By proposing a more nuanced, risk‑adjusted framework, they aim to balance the twin goals of fostering innovation and protecting investors, thereby laying the groundwork for a vibrant, future‑ready European capital market.