In a coordinated effort that underscores the growing importance of digital asset infrastructure across Europe, major market participants such as Nasdaq, Germany’s Börse Stuttgart, and a range of other financial institutions have formally appealed to European Union regulators to either eliminate or substantially increase the existing ceiling that governs the tokenisation pilot programme. The coalition’s statement, issued earlier this week, emphasizes that the current cap – set at a modest level when the experiment was first launched – now acts as a bottleneck, constraining the full potential of tokenised securities and other blockchain‑based financial products. The tokenisation trial, which began as a proof‑of‑concept initiative under the EU’s broader Digital Finance Strategy, was designed to test how traditional assets—such as equities, bonds, and real‑estate holdings—could be represented as digital tokens on distributed ledger technology (DLT). By doing so, regulators hoped to assess the benefits of increased transparency, faster settlement times, and broader market access, while simultaneously monitoring risks related to investor protection, market integrity, and anti‑money‑laundering safeguards.
When the pilot was first introduced, the European Commission set a provisional limit on the total market value of assets that could be tokenised within the sandbox environment. This ceiling was intended to keep the experiment manageable and to allow supervisors to gather data without exposing the wider financial system to undue uncertainty. At the time, the limit seemed appropriate given the nascent state of the technology and the limited number of participants willing to commit capital to a regulatory test‑bed.
Fast forward to today, and the landscape has shifted dramatically. Nasdaq, a global exchange operator with a long history of pioneering market infrastructure, has already begun to integrate tokenised securities into its own service offerings. Börse Stuttgart, Europe’s leading exchange for retail investors, has launched a dedicated digital platform that allows private investors to purchase tokenised shares of German companies directly from their smartphones.
In addition, a host of fintech firms, custodians, and asset managers have joined the pilot, each bringing new use cases—ranging from fractional ownership of high‑value assets to cross‑border issuance of corporate bonds. According to the coalition’s letter, several of these projects have already exceeded the original cap. For example, a joint venture between a German real‑estate developer and a blockchain startup has tokenised a portfolio of commercial properties valued at more than €150 million, far surpassing the trial’s aggregate limit of €100 million.
Similarly, a consortium of mid‑size European issuers has issued tokenised corporate bonds totaling €120 million, again breaching the threshold. These examples illustrate that the cap, rather than serving as a prudent safeguard, is now preventing legitimate market activity from scaling within the sandbox.
The signatories argue that maintaining the current limit would not only stifle innovation but also put Europe at a competitive disadvantage relative to other jurisdictions. The United States, Singapore, and several Asian economies have already adopted more permissive approaches, allowing tokenised assets to be issued and traded at volumes that dwarf the EU’s pilot. By contrast, European firms are forced to either curtail their projects or seek alternative regulatory regimes abroad, potentially resulting in a loss of talent, investment, and technological expertise. In their request, the coalition proposes two possible pathways for the European Commission and the European Securities and Markets Authority (ESMA): 1.
**Complete removal of the cap** – This would enable participants to tokenise assets up to any value, subject only to existing prudential and conduct requirements. The removal would align the pilot with the principle‑based oversight model that the EU has been championing for other fintech innovations. 2.
**Substantial increase of the ceiling** – If regulators are reluctant to eliminate the limit outright, the coalition suggests raising it to at least €500 million, a figure they argue would accommodate the foreseeable growth of tokenisation projects while still allowing supervisors to monitor systemic implications. Beyond the immediate practical concerns, the coalition highlights broader policy objectives that would benefit from a higher cap.
First, a larger tokenised market would generate richer data on settlement cycles, liquidity patterns, and investor behaviour, thereby informing future regulatory frameworks. Second, expanding the trial would accelerate the development of ancillary services—such as digital custody, compliance automation, and smart‑contract legal wrappers—that are essential for a fully functional tokenised ecosystem. Third, a more permissive environment would encourage cross‑border collaboration, as issuers could more easily reach investors throughout the EU without having to navigate a patchwork of national rules. Critics of the proposal caution that a sudden increase in tokenised volumes could expose the market to heightened operational risk, especially if participants lack robust DLT infrastructure or if smart‑contract code is not sufficiently audited.
In response, the coalition points to the rigorous testing protocols already embedded in the pilot, including mandatory third‑party code reviews, real‑time monitoring of on‑chain activity, and regular reporting to supervisory authorities. They also note that the pilot’s governance framework allows regulators to intervene promptly should any systemic concerns arise. The EU’s next steps will involve a formal assessment by the European Commission’s Directorate‑General for Financial Stability, Financial Services and Capital Markets Union (DG‑FIN) and a consultation with ESMA. Stakeholders are expected to submit additional feedback during a public comment period slated for the coming weeks.
If the Commission decides to act on the coalition’s recommendations, the amendment could be incorporated into the pilot’s regulatory technical standards, with an effective date potentially as early as the start of the next fiscal quarter. In summary, the appeal from Nasdaq, Börse Stuttgart, and their allied partners reflects a pivotal moment in Europe’s digital finance journey.
By urging the removal or significant increase of the tokenisation cap, they seek to unlock the full promise of blockchain‑enabled securities—greater efficiency, broader participation, and innovative product design—while maintaining the regulatory vigilance that safeguards market stability. The outcome of this request will likely shape not only the trajectory of the current sandbox but also the broader regulatory architecture that will govern tokenised assets across the European Union for years to come.