In a coordinated effort that underscores the growing importance of digital assets in the broader financial ecosystem, a coalition of leading market participants—including Nasdaq, the Börse Stuttgart, and a number of other prominent exchanges and fintech firms—has formally appealed to the European Union to either remove the existing ceiling on tokenisation projects or to raise it to a level that reflects current market realities. The request is rooted in the belief that the current cap, which was introduced as part of a pilot framework intended to test the feasibility and safety of tokenising real‑world assets, is now acting as a bottleneck that hampers innovation, limits the scale of viable projects, and ultimately puts Europe at a competitive disadvantage compared to jurisdictions such as the United States and Singapore, where regulatory thresholds are more accommodating. The coalition’s letter, addressed to the European Commission and the European Securities and Markets Authority (ESMA), outlines several key arguments.
First, the signatories note that the original limit—set at a modest €100 million for the aggregate value of tokenised assets under the pilot—was deliberately conservative. It was designed to allow regulators to observe how tokenisation technology functions in a controlled environment, to assess risks related to investor protection, market integrity, and anti‑money‑laundering safeguards. However, the coalition argues that the pilot has now progressed far beyond its initial exploratory phase. Real‑world use cases have emerged, ranging from tokenised equity shares and corporate bonds to tokenised real‑estate parcels and even fractional ownership of fine art.
In many of these cases, the value of the underlying assets already exceeds the €100 million threshold, meaning that projects are forced either to truncate the scope of their offerings or to abandon tokenisation altogether. "We have witnessed a rapid maturation of the tokenisation market over the past two years," the letter states.
"Several of our members are already managing tokenised securities portfolios that collectively surpass the current cap by a significant margin. Maintaining the status quo would not only stifle ongoing projects but also deter new entrants who see the EU’s framework as overly restrictive." To illustrate the point, the coalition cites three illustrative examples: 1. **A cross‑border bond issuance platform** that has successfully tokenised a €150 million corporate bond, allowing investors across the EU to trade fractional units on a regulated exchange.
The platform’s operators argue that the cap forces them to split the issuance into multiple, smaller tranches, increasing administrative costs and reducing liquidity. 2. **A tokenised real‑estate fund** that aggregates properties across Germany, France, and the Netherlands.
The fund’s total asset value stands at €200 million, but under the current rules it can only tokenise a portion of the portfolio, limiting investor participation and undermining the fund’s business model. 3. **A digital art marketplace** that has tokenised a collection of high‑value paintings, with a combined valuation of €120 million.
The platform’s founders contend that the cap prevents them from offering a full suite of tokens that represent the entire collection, thereby reducing the attractiveness of the marketplace for both collectors and investors. Beyond these concrete cases, the coalition emphasizes that the cap also hampers the development of ancillary services that are essential for a vibrant token ecosystem. Custody providers, settlement infrastructures, and compliance solutions all rely on a critical mass of tokenised assets to achieve economies of scale. When the total market size is artificially constrained, these service providers struggle to justify the investment needed to build robust, secure, and interoperable platforms.
The letter also addresses the regulatory perspective. While acknowledging the EU’s legitimate concerns about investor protection and market stability, the coalition argues that a higher cap—or the removal of the cap altogether—does not inherently increase risk.
On the contrary, a larger pool of tokenised assets would enable more comprehensive data collection and analysis, allowing regulators to monitor market dynamics more effectively. Moreover, the coalition proposes a set of safeguards that could be implemented alongside a higher limit, such as: - **Enhanced reporting requirements** for token issuers, including periodic disclosures of underlying asset valuations and audit reports. - **Stricter AML/KYC protocols** tailored to the digital nature of token transactions, leveraging blockchain analytics tools. - **Dynamic risk‑based capital requirements** for intermediaries, calibrated to the size and complexity of the tokenised assets they handle.
These measures, the coalition suggests, would preserve the EU’s high standards for market integrity while providing the flexibility needed for the sector to scale. The appeal arrives at a pivotal moment for European fintech policy. The EU’s Markets in Crypto‑Assets (MiCA) regulation, set to become fully applicable later this year, aims to create a harmonised framework for crypto‑related activities.
Tokenisation sits at the intersection of traditional securities law and emerging digital asset regulation, and the outcome of this lobbying effort could shape how MiCA is interpreted and applied to tokenised securities. Industry analysts note that the EU’s approach to tokenisation will have broader implications for capital markets integration across the bloc. If the cap is lifted or increased, it could accelerate the adoption of tokenised assets as a tool for cross‑border financing, reduce settlement times, and lower transaction costs. Conversely, maintaining a low ceiling may push innovators to seek more favourable regulatory environments outside the EU, potentially resulting in a loss of talent and investment.
In summary, Nasdaq, the Börse Stuttgart, and their partners are urging European regulators to revisit the tokenisation pilot’s monetary ceiling. They argue that the current €100 million limit no longer reflects the maturity of the market, hampers existing projects that already exceed the threshold, and discourages new initiatives that could drive growth and competitiveness. By proposing a suite of targeted safeguards, the coalition seeks to balance the need for investor protection with the desire to foster innovation. The EU’s response to this request will likely influence the trajectory of digital securities in Europe for years to come.