A coalition of European finance and tokenization industry groups is urging Brussels to scrap the caps that limit how many assets can be traded on blockchain-based market infrastructure, warning that current restrictions are stifling the region's competitiveness in digital finance.
The Push to Lift Restrictions
The groups argue that the European Union should eliminate the limits placed on securities admitted to distributed ledger technology (DLT) infrastructure. Under the existing framework, the volume of tokenized instruments that can operate within regulated blockchain systems is constrained, which industry advocates say discourages firms from committing serious capital to the space.
Rather than nurturing innovation, they contend, the ceilings act as a deterrent, pushing potential activity toward jurisdictions with more accommodating rules. The message to policymakers is that Europe risks falling behind in the global race to modernize capital markets through tokenization.
Removing the ceiling would signal that Europe is serious about leading, not lagging, in the tokenized future of finance.
A Fallback Proposal
Recognizing that regulators may be reluctant to abandon caps entirely, the coalition offered a compromise. If a limit must remain in place, they propose raising the baseline substantially to 1.5 trillion euros, a figure they say would give the market room to grow while still preserving a regulatory boundary.
The suggestion reflects a pragmatic approach from the industry, which acknowledges the concerns of supervisors around systemic risk while pressing for meaningful headroom. Supporters believe a higher threshold could unlock broader participation from institutional players who have so far stayed on the sidelines.
Key points raised by the groups include:
- Existing caps discourage investment in DLT-based market infrastructure
- A full removal of limits is the preferred outcome
- A 1.5 trillion euro baseline is offered as a fallback if caps stay
- The changes are framed as essential to EU competitiveness
The recommendations arrive as the EU continues to refine its approach to blockchain-based finance, with industry stakeholders keen to shape the rules before the framework hardens into place.