In a coordinated effort to influence European regulatory policy, a coalition of prominent financial market participants—including Nasdaq, Boerse Stuttgart, and a range of other exchanges and service providers—has formally appealed to the European Union to either remove the existing ceiling on tokenisation activities or to raise it substantially during the current experimental phase. This request stems from a growing consensus among industry stakeholders that the current limit, which was introduced as a precautionary measure to monitor the nascent tokenisation market, now acts as a bottleneck that stifles innovation, hampers liquidity, and prevents the full realisation of the benefits that digital assets can bring to the broader financial ecosystem. The coalition’s submission to EU regulators outlines several key arguments. First, it points out that the present cap—originally set at a modest figure to allow regulators a controlled environment for observation—has already been outstripped by a number of ongoing projects across the continent.
Several pilot programmes, ranging from tokenised securities offerings to asset‑backed token platforms, have reported transaction volumes and token issuances that exceed the stipulated ceiling. By highlighting these concrete examples, the coalition demonstrates that the cap no longer reflects the operational realities on the ground and is, in practice, an artificial constraint. Second, the coalition stresses that the tokenisation of assets—whether equities, bonds, real‑estate interests, or even intangible intellectual property—offers a suite of efficiencies that can transform capital markets. Tokenisation can dramatically reduce settlement times, cut down on intermediaries, lower transaction costs, and enhance transparency through immutable ledger technology.
Moreover, it can broaden investor access by fractionalising high‑value assets, thereby democratizing investment opportunities that were previously limited to institutional players or high‑net‑worth individuals. Removing or raising the cap would enable more projects to scale, generate richer data for regulators, and accelerate the development of best‑practice standards. In addition to the economic arguments, the coalition also raises concerns about competitive parity on a global stage.
Other jurisdictions, such as the United States, Singapore, and several offshore financial centres, have adopted more flexible approaches to tokenisation, often providing clearer pathways for larger‑scale deployments. If the EU maintains a restrictive ceiling, it risks ceding its position as a leader in financial innovation to these more permissive markets, potentially driving talent, capital, and technological expertise abroad. The coalition’s appeal does not merely call for a blanket removal of oversight. Instead, it proposes a calibrated adjustment to the cap that aligns with the measured risk appetite of regulators while still providing sufficient headroom for growth.
The suggested framework includes periodic reviews of the ceiling based on empirical data collected during the trial, the implementation of tiered limits that correspond to the risk profile of different asset classes, and the introduction of enhanced reporting requirements for participants that exceed certain thresholds. Such a nuanced approach would preserve the EU’s commitment to investor protection and market stability while unlocking the transformative potential of tokenised finance. Furthermore, the coalition outlines a roadmap for how the increased flexibility could be operationalised.
It recommends that the EU establish a dedicated sandbox environment where tokenisation projects can test larger‑scale issuances under supervisory guidance. This sandbox would be equipped with real‑time monitoring tools, allowing regulators to observe market dynamics, identify systemic risks early, and intervene if necessary. By coupling a higher cap with robust supervisory technology, the EU can strike a balance between innovation and oversight.
The coalition also points to the positive externalities that a more permissive tokenisation regime could generate. For instance, greater token liquidity can improve price discovery for traditionally illiquid assets, such as private equity stakes or infrastructure projects, thereby reducing the cost of capital for issuers.
Additionally, the data generated from tokenised transactions can feed into advanced analytics, supporting better risk assessment models and informing policy decisions. In summary, the coalition’s message to EU policymakers is clear: the current tokenisation cap, while well‑intentioned at the outset, has become an impediment to the sector’s natural growth trajectory.
By either eliminating the limit entirely or raising it to a level that reflects the scale of contemporary projects, the EU can foster a more vibrant, inclusive, and competitive financial market. This adjustment would not only benefit market participants but also enhance the EU’s standing as a hub for cutting‑edge financial technology.
The coalition stands ready to collaborate with regulators, provide data-driven insights, and help shape a regulatory framework that safeguards investors while embracing the future of digital assets.