European financial and tokenization groups are asking EU lawmakers to remove or increase the proposed limit on tokenized financial instruments. The groups argue that the proposed 100 billion euro cap may be too low for Europe to develop blockchain-based trading and settlement on a larger scale.
On September 7, a draft letter was sent to EU Council members and the European Parliament’s Economic and Monetary Affairs Committee. The groups asked the European Union to remove the cap completely. If lawmakers decide to keep a limit, they suggested that it should be at least 500 billion euros.
The groups that signed the letter include Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute, and Axiology. The groups stated that some existing European projects have already reached around 350 billion euros in scale and are planning to grow further. Because of this, they believe a 100 billion euro ceiling would not provide enough room for future growth.
Concerns Over Europe’s DLT Rules
There is a specific call for changes to the EU’s Distributed Ledger Technology (DLT) Pilot Regime. They want the EU to change the rules of this blockchain-finance testing framework, particularly the limits that restrict how much value of tokenized financial instruments can use the system. The framework took effect in 2023.
The European Commission has proposed increasing the current 6 billion euro limit to 100 billion euros as part of its Market Integration and Supervision Package.
But even with this proposed increase, the groups still argue that the limit is too small because the threshold is based on the market value of financial instruments admitted to DLT infrastructure rather than their actual trading volume. They argued that this limit is relatively small when compared with the size of global financial markets.
The coalition also compared the EU’s approach with the United States. According to the letter, a major US settlement platform can tokenize US equities and other assets without similar caps and could potentially cover assets worth as much as 150 trillion euros.
Increasing Pressure for Change
The letter sent on September 7 is part of a wider campaign by financial and tokenization companies to change the EU’s DLT rules.
In February, several firms, including Securitize, 21X and Boerse Stuttgart, warned that existing asset limits, volume caps and time-limited licenses were making it harder for regulated blockchain-based markets to grow in Europe. They also warned that liquidity could move toward US markets if the EU did not make changes, while the US continued developing larger-scale tokenization and blockchain settlement.
In April, 39 financial firms and industry groups, including Nasdaq and Boerse Stuttgart, also called for faster changes to the DLT Pilot Regime. They proposed raising the limit to between 100 billion and 150 billion euros, while also asking for broader asset eligibility and the removal of time limits on licenses.
The latest proposal goes further by calling for a 500 billion euro baseline if a cap remains.
The discussion comes as tokenized real-world assets continue to develop. The article cites a total value of around $39.15 billion for distributed real-world assets, with US Treasury debt making up the largest category at about $15.8 billion.
