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BTC European financial giants call on the EU to increase asset tokenization caps
Europe's leading financial institutions and industry organizations focusing on asset tokenization are jointly speaking out, demanding that the EU either cancel the proposed € 100 billion cap on tokenization financial instruments or significantly increase the limit. According to industry stakeholders, the current draft restrictions are not consistent with the growth ambitions of the European market.
Is the proposed cap sufficient?
An open letter dated September 7 has been sent to members of the European Council and members of the Economic and Monetary Affairs Committee (ECON) of the European Parliament. The signatories to the letter believe that if the ceiling must be retained, it should not fall below Euro500 billion.
The letter was signed by industry heavyweights such as Nasdaq, Boerse Stuttgart Group, Securitize, European Ethereum Institute and Axiology. NASDAQ, a global trading and market technology giant, has become a powerful advocate for this demand. [TAG
"Europe already has € 350 billion in projects aimed at sustained growth, which proves that the € 100 billion ceiling will be restrictive," the EU said.
Industry representatives emphasized that the proposed cap targets the market value of financial instruments that qualify for distributed ledger technology (DLT) infrastructure, rather than transaction volume. Compared with the size of the global stock market, the threshold of 100 billion euros is considered too limited.
Can Europe compete with the United States?
The letter emphasized the flexibility of the American model. The signatories pointed out that in the United States, dominant trading platforms can tokenize stocks and other assets with no trading volume limits, and the assets they cover extend to 150 trillion euros.
The European Commission's recommendation is to increase the current € 6 billion cap in the Cryptographic Asset Markets Regulation (MiCA) to € 100 billion. The plan also includes amendments to the DLT Pilot Regime.
The Distributed Ledger Technology Pilot Mechanism introduced in 2023 allows financial institutions to test the trading and settlement of assets such as stocks and bonds based on blockchain without complying with some EU financial rules.
Summary of core views:
- Major financial institutions and tokenization institutions are lobbying the EU to increase or remove the cap on tokenized financial instruments.
- The "Distributed Ledger Technology Pilot Mechanism" provides a blockchain transaction testing environment that can be carried out without full compliance.
- Competitive pressure from the United States has prompted the EU to adopt a more flexible tokenization restriction policy.
Continued pressure from the financial industry is not new. As early as April this year, a coalition of 39 financial institutions, including the Nasdaq and Stuttgart Stock Exchanges, called for immediate reform of the Distributed Ledger Technology Pilot Mechanism and an extension of the total cap to 100 billion to 150 billion euros. In February, calls such as those promoted by agencies such as Securitize and 21X warned that current asset limits and temporary licenses were hindering the expansion of Europe's regulated chain markets and could lead to liquidity flowing into the U.S. market.
