A coalition of Europe’s largest exchange operators and tokenization firms is pressing European Union lawmakers to abandon a proposed €100 billion (approximately $116.2 billion) ceiling on tokenized financial instruments, arguing the limit would cripple the continent’s ability to compete with the United States in digital asset markets.

In a draft letter dated September 7 and addressed to members of the EU Council and the European Parliament’s Economic and Monetary Affairs Committee, the group urged policymakers to remove the cap entirely or, at minimum, raise it to €500 billion. Signatories include Nasdaq, Boerse Stuttgart Group, Securitize, the European Ethereum Institute, and Axiology.

The coalition contends that existing European tokenization projects have already reached approximately €350 billion in scale and are planning further expansion, making the proposed threshold untenable. “Existing projects in Europe already reach €350 billion in scale and further growth is planned, so a €100 billion ceiling would not be suitable for the evolving market,” the letter states.

The Regulatory Framework Under Fire

The contested cap stems from the European Commission’s Market Integration and Supervision Package, which proposes revisions to the Distributed Ledger Technology (DLT) Pilot Regime. That regime, operational since 2023, permits approved financial institutions to test blockchain-based trading and settlement of assets such as stocks and bonds under exemptions from certain EU financial rules.

The Commission has recommended raising the previous €6 billion limit to as much as €100 billion. However, the industry coalition argues that even this higher threshold remains inadequate when measured against global equity markets. A key point of contention is how the cap is calculated: it applies to the aggregate market value of financial instruments admitted to DLT infrastructure, rather than trading volume—a distinction the signatories say makes the proposed number structurally restrictive.

The American Comparison

The letter draws a sharp contrast with the United States, where the coalition claims a dominant settlement platform can tokenize equities and other assets without volume restrictions. That approach, according to the signatories, could theoretically cover an asset universe extending to €150 trillion.

This asymmetry has become a central argument in the industry’s campaign. Without rapid reform, the groups warn, liquidity and innovation could migrate to US markets, where regulators have demonstrated increasing openness to large-scale tokenization and blockchain-based settlement processes.

A Pattern of Escalating Pressure

This latest appeal is not an isolated effort. In April, 39 financial firms and industry groups—including Nasdaq and Boerse Stuttgart—called on EU policymakers to fast-track amendments to the DLT Pilot Regime and raise its overall limit to between €100 billion and €150 billion. That earlier letter also sought broader asset eligibility and the removal of time limits on licenses issued under the program.

February saw a similar push from tokenization and market infrastructure firms including Securitize, 21X, and Boerse Stuttgart. They warned that existing asset limits, volume caps, and time-limited licenses were preventing regulated onchain markets from scaling in Europe, with liquidity potentially shifting to US markets as regulators there moved toward larger-scale tokenization.

The repeated appeals reflect a fundamental tension in the EU’s approach. The DLT Pilot Regime was designed as a testing framework, but industry participants increasingly want it to function as a scalable launchpad for regulated tokenized markets.

The Broader Tokenization Landscape

The debate unfolds against a backdrop of accelerating growth in real-world asset tokenization. The total value of distributed RWAs globally has reached approximately $39.15 billion, excluding stablecoins, with US Treasury debt accounting for roughly $15.8 billion of that figure, according to RWA.xyz data cited in the letter.

The table below summarizes the key figures at the center of the dispute:

Note: Figures reflect market value of admitted instruments rather than trading volume, according to the coalition’s letter.

What Comes Next

EU lawmakers now face a decision on whether to recalibrate the cap structure to support tokenization scale or maintain tighter limits for oversight reasons. For market participants, the key question is how the EU responds to the September 7 request—and whether revised thresholds continue to be based on admitted market value rather than alternative measures.

The outcome could shape how quickly tokenized securities trading expands within the EU relative to competing financial centers. If regulators agree to raise or remove the caps, exchanges participating in the pilot could see increased institutional activity, potentially attracting more market makers and custodians to build out supporting infrastructure. A continuation of current limits, however, could slow momentum for tokenized markets in Europe.

Any decision to adjust the caps would need to proceed through EU regulatory processes, which typically involve consultation with securities regulators and member states. No timeline for a response has been indicated.