Objection to the Proposed €100 Billion Limit in the EU’s Tokenization Pilot: What Does the Industry Want?

Organizations, including Nasdaq and Boerse Stuttgart, have requested that the €100 billion cap in the EU’s tokenized securities pilot be removed or increased to at least €1.5 trillion.

Nasdaq, Boerse Stuttgart, Adan, the Crypto Council for Innovation, and the European Ethereum Institute conveyed their demands through a joint letter sent to the European Council and the European Parliament. Industry representatives argued that the new limit proposed by the European Union would restrict the growth of tokenized financial products.

The EU’s pilot regime allows for the representation of stocks, bonds, and investment funds as digital assets on the blockchain, as well as the testing of the trading and settlement of these products. Following limited participation in the pilot regime, the European Commission proposed raising the current €6 billion cap to €100 billion.

Industry’s Target is €1.5 Trillion

The organizations, however, find the €100 billion proposal insufficient. The coalition wants the cap to be completely removed or raised to at least €1.5 trillion. This figure is 15 times higher than the limit proposed by the Commission.

The cap mentioned in the letter refers to the total market value of the securities accepted on the platforms, not the transaction volume. Therefore, even if very few transactions occur on a platform, the total value of the supported assets can reach the limit.

The organizations also opposed granting higher limits to central securities depositories than to other blockchain-based market operators. Stating that such a practice could put new service providers at a disadvantage, the coalition requested that if the limit is to be maintained, the Commission should be able to increase this boundary as the market grows, and that future increases not be tied to a pre-determined upper limit.