European finance lobby urges EU to raise or scrap cap on tokenized securities

A group of European market-infrastructure and tokenization organizations is pressing EU lawmakers to revisit plans to cap tokenized financial instruments, arguing the proposed ceiling is too low to support meaningful growth in blockchain-based trading and settlement. In a draft letter dated Sept. 7 to EU Council members and the European Parliament's Economic and Monetary Affairs Committee, the signatories call for removing the proposed 100 billion euro limit or increasing it to at least 500 billion euros if policymakers insist on keeping a cap. The coalition says some European tokenized-finance initiatives are already operating at roughly 350 billion euros in scale and expect further expansion. On that basis, it argues a 100 billion euro ceiling would restrict development at a stage when tokenized markets are still building liquidity, operational capacity, and investor participation. A central point in the letter is that the threshold is linked to the market value of instruments admitted to distributed-ledger (DLT) infrastructure, not trading activity. The groups contend this design makes 100 billion euros look small relative to global equity markets. Signatories include Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute, and Axiology. They frame the request as a practical requirement for regulated tokenization rather than a theoretical debate over digital securities. The letter also contrasts Europe's approach with the United States, claiming a "dominant settlement platform" in the US can tokenize equities and other assets without comparable volume caps, potentially supporting tokenization exposure of about 150 trillion euros in assets. The push comes as the European Commission advances its Market Integration and Supervision Package, which includes proposed updates to the DLT Pilot Regime. ESMA says the regime took effect in 2023 and allows regulated firms to test blockchain-based trading and settlement for assets such as stocks and bonds under specific conditions and exemptions. Under the Commission proposal cited in the industry letter, the regime's current 6 billion euro limit could rise to as much as 100 billion euros. The coalition argues that any meaningful step toward scale should better match market reality, particularly given the cap is assessed on admitted instrument market value rather than transaction volume. It proposes 500 billion euros as an interim "baseline" threshold if a cap remains. The Sept. 7 letter follows earlier industry campaigns. In February, firms including Securitize, 21X, and Boerse Stuttgart warned that existing asset limits, volume caps, and time-limited licenses were preventing regulated on-chain markets from scaling in Europe, and cautioned liquidity could migrate to the US. In April, a broader group of 39 firms and industry bodies—including Nasdaq and Boerse Stuttgart—urged policymakers to accelerate changes to the DLT Pilot Regime, raise the overall limit to between 100 billion euros and 150 billion euros, broaden eligible assets, and remove time limits on licenses. By Sept. 7, the coalition had raised its ask from the earlier 100–150 billion euro range to a minimum of 500 billion euros or the complete removal of any cap. The debate plays out as tokenized real-world assets continue to expand but remain concentrated in a narrow set of categories. Industry tracker RWA.xyz puts total distributed RWA at about $39.15 billion excluding stablecoins, with US Treasury debt the largest segment at roughly $15.8 billion. EU lawmakers now face competing proposals: the Commission's 100 billion euro ceiling within the Market Integration and Supervision Package versus the industry's call to scrap the limit or lift it to at least 500 billion euros. Market participants are watching whether regulators treat capacity limits as a temporary pilot constraint or as a long-term brake on scaling—and how that choice influences where liquidity and tokenized issuance ultimately concentrate as the DLT Pilot Regime evolves.