EU Finance Groups Urge Lawmakers to Scrap Tokenized Securities Cap or Raise It to 500 Billion Euro

A coalition of European financial institutions and tokenization firms is urging European Union lawmakers to scrap a proposed 100 billion euro cap on tokenized financial instruments, arguing the ceiling would strangle the region’s onchain capital markets just as competition with the United States intensifies.

The draft letter, dated September 7 and addressed to EU Council members and the European Parliament’s Economic and Monetary Affairs Committee, called for the cap to be removed entirely or raised to at least 500 billion euro if lawmakers insist on keeping a threshold. Signatories include Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute and Axiology, according to documents reviewed by industry press.

Why 100 billion euro is not enough

The groups pointed out that some existing European projects already operate at roughly 350 billion euro in scale and plan further growth, making the proposed 100 billion euro ceiling inadequate before it even takes effect. The letter stressed that the thresholds apply to the market value of financial instruments admitted to distributed ledger technology infrastructure, not their trading volume, which makes the proposed cap small relative to global equity markets.

The Commission has proposed raising the current 6 billion euro limit to as much as 100 billion euro as part of its Market Integration and Supervision Package, which includes revisions to the Distributed Ledger Technology Pilot Regime. That regime, in effect since 2023, allows financial firms to test blockchain-based trading and settlement of assets such as stocks and bonds under exemptions from certain EU financial rules.

The coalition also contrasted Europe’s approach with the United States, where, in its words, a dominant settlement platform is enabled to tokenize US equities and other assets without volume caps, an addressable universe the letter estimated could cover as much as 150 trillion euro in assets. The implicit warning: if regulated onchain markets cannot scale inside the EU, issuance and liquidity will migrate to venues that face no such ceilings.

Months of pressure on the DLT Pilot Regime

The September letter is the third coordinated industry push this year. In April, 39 financial firms and industry groups, including Nasdaq and Boerse Stuttgart, urged EU policymakers to fast-track changes to the DLT Pilot Regime and raise its overall limit to between 100 billion euro and 150 billion euro. That letter also called for broader asset eligibility and the removal of time limits on licenses issued under the regime.

The April push followed a similar call in February from tokenization and market infrastructure firms including Securitize, 21X and Boerse Stuttgart, which warned that existing asset limits, volume caps and time-limited licenses were preventing regulated onchain markets from scaling in Europe. The February warning contended that without faster changes, liquidity could migrate to US markets as regulators there moved toward larger-scale tokenization and onchain settlement.

Tokenization race heats up

The policy fight comes as tokenized real-world assets continue to expand. The total value of distributed real-world assets stands at about 39.15 billion USD, excluding stablecoins, with US Treasury debt the largest category at roughly 15.8 billion USD, according to RWA.xyz data cited alongside the letter.

Institutional momentum has been building on both sides of the Atlantic. Nasdaq recently invested 100 million USD in Kraken parent Payward at a 21 billion USD valuation with plans for tokenized Nasdaq stocks, while European projects such as tokenized grain warehouse receipts on Avalanche and Swiss franc stablecoin experiments in Switzerland show the breadth of experimentation underway. Standard Chartered analysts have projected that tokenized real-world assets could surge toward 4 trillion USD by the end of the decade.

For EU policymakers, the letter poses an uncomfortable question: whether a rules-based pilot regime with hard ceilings can compete with jurisdictions that let scaled settlement infrastructure grow without predetermined limits. The industry’s answer is clearly no, and the 500 billion euro fallback demand signals how far apart regulators and market participants remain.

What happens next

The letter will feed into ongoing negotiations over the Market Integration and Supervision Package in the Council and Parliament. If lawmakers accept the higher baseline, European DLT market infrastructures would gain headroom that keeps large-scale issuance onshore. If they hold the line at 100 billion euro, the industry has effectively previewed its next argument: that the cap will function as an incentive for issuers to choose US rails from day one.

The DLT Pilot Regime was always designed as a sandbox, a temporary testing ground meant to inform permanent rules. Three industry letters in seven months suggest the sector believes the testing phase is over and that the question now is whether Europe wants to host the market it helped pioneer or watch it settle elsewhere.

Bitcoin traded around 77,100 USD, ether near 2,446 USD and solana around 100 USD at the time of writing.