Nasdaq, Boerse Stuttgart, others ask EU to remove or increase cap in tokenization trial

European financial and crypto industry groups urged lawmakers to scrap limits on tokenized securities platforms or set a ceiling of at least 1.5 trillion euros ($1.74 trillion), arguing that a proposed 100 billion-euro cap would constrain growth.

The request came in a letter addressed to the European Council and European Parliament with signatories including French digital asset association Adan, the Crypto Council for Innovation and the European Ethereum Institute, along with companies including Nasdaq and Boerse Stuttgart.

The European Union’s decentralized ledger pilot regime allows operators to test trading and settlement of tokenized stocks, bonds and investment funds with exemptions from certain existing financial rules. The European Commission proposed expanding the pilot’s framework after seeing what it called “modest” participation.

Tokenization is the representation of financial instruments on a blockchain as a digital asset.

The commission proposed raising the current 6 billion-euro ceiling to 100 billion. Adan said the increase remains insufficient given developments in global markets. The group’s preferred outcome is to remove the cap entirely, or, at least, set it to 1.5 trillion euros, 15 times the proposed ceiling.

Some existing European projects already reach 350 billion euros and plan further growth, the letter writers said. They did not identify those projects or explain how that figure was calculated.

The letter stresses that the thresholds concern the market value of admitted securities, rather than trading volume. That means a platform’s capacity depends on the value of the instruments it supports, even when relatively little changes hands.

The groups also opposed differentiated limits that could allow central securities depositories, which maintain securities records and handle settlement, to have substantially more capacity than other blockchain market operators. They argued that this would disadvantage newer providers.

The coalition contrasted Europe’s proposed restrictions with an unidentified dominant U.S. settlement platform that it said could tokenize stocks and other assets without volume caps.

If lawmakers retain a cap, the coalition wants the commission to be able to raise it as markets grow without a predetermined maximum restricting future increases.