Nasdaq, 28 Firms Urge EU to Scrap Tokenization Cap or Raise It to at Least 1.5 Trillion Euros

Nasdaq, Boerse Stuttgart and other global finance and crypto industry participants are urging the European Union to scrap or expand the cap applied to its pilot regime for tokenized securities.

CoinDesk reported on September 10 that 28 companies and industry groups, including France's digital-asset association Adan, submitted a joint letter to the Council of the European Union and the European Parliament calling for a higher ceiling under the EU's Distributed Ledger Technology Pilot Regime.

The signatories included Nasdaq, Boerse Stuttgart, the Crypto Council for Innovation and the European Ethereum Institute.

The DLT pilot regime allows firms to test trading and settlement systems for tokenized stocks, bonds and funds while receiving exemptions from parts of existing financial regulations. The European Commission recently proposed raising the current cap on tokenized financial instruments to as much as 100 billion euros from 6 billion euros.

The industry argues that the cap should be abolished altogether. If it is kept, the ceiling should be set at no less than 1.5 trillion euros, or 15 times the level proposed by the Commission. In the letter, the group said some European tokenization projects are already worth 350 billion euros.

The letter also said the Commission's cap is based on the market value of securities listed on a platform rather than trading volume. As a result, platforms could reach the limit quickly if the valuations of listed stocks and bonds are high, even when actual trading is limited.

The companies and institutions that signed the letter also cited major U.S. payments infrastructure, where assets including stocks can be tokenized without a separate cap. They said that is why tokenization limits could weaken Europe's global competitiveness.