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Nasdaq, Börse Stuttgart Group and other European market infrastructure players are calling on EU lawmakers to reconsider a proposed €100 billion limit under the bloc’s Distributed Ledger Technology (DLT) Pilot Regime.
The proposed adjustment is part of the European Commission’s Market Integration and Supervision Package (MISP), which would increase the current DLT Pilot Regime cap from €6 billion to as much as €100 billion.
However, a coalition of market infrastructure and digital asset industry stakeholders argues that the proposed increase does not provide sufficient room for the tokenised capital markets to scale.
Industry group says €100bn cap could constrain DLT growth
In a letter addressed to members of the European Parliament and the Council, organisations including Axiology, France Fintech and the Crypto Council for Innovation said the proposed €100 billion threshold remains relatively small when compared with the scale of global equity markets.
The group said rapid developments in international markets, particularly in the United States, make a higher threshold necessary for Europe to remain competitive.
“Given rapid market developments, especially in the US, it proves insufficient, considering current capital market volumes,” the signatories said, pointing to existing European projects that already have volumes reaching €350 billion and have plans to expand further.
According to the group, retaining the proposed ceiling could restrict European projects that are already operating at significant scale and create unnecessary limitations for the development of tokenised financial market infrastructure.
Stakeholders propose €1.5tn baseline
The signatories are urging European lawmakers to either remove the DLT cap entirely or increase it substantially.
Their preferred option is to establish a €1.5 trillion baseline, alongside a mechanism that would allow the European Commission to increase the threshold as market activity and adoption develop.
The proposal reflects growing industry pressure for regulatory frameworks to accommodate the expanding role of DLT in capital markets without creating artificial constraints on market participants.
For European financial institutions and market infrastructure providers, the size of the regulatory ceiling could influence the scale at which tokenised securities and other DLT-based financial instruments can be developed and traded.
Axiology warns regulation could become a barrier to scale
Marius Jurgilas, CEO of Axiology, said Europe’s regulated approach to tokenised capital markets has laid important foundations but must now allow the sector to grow.
“Europe has spent years building a regulated framework for tokenised capital markets, but the next test is whether those markets will be allowed to scale.”
Jurgilas warned that while €100 billion may appear substantial, it could become a constraint for large market infrastructure projects as investment and adoption increase.
“A €100 billion ceiling may look generous on paper, but for market infrastructure it could quickly become a brake on investment and scale.”
He said the EU has an opportunity to provide regulated DLT markets with enough capacity to compete internationally while ensuring that new market entrants operate under comparable rules to established financial market infrastructure providers.
The debate highlights a broader challenge facing regulators as tokenisation moves from experimentation towards larger-scale applications: ensuring that regulatory frameworks provide adequate safeguards without limiting innovation, investment and market development.
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