Nasdaq, Borse Stuttgart urge EU to raise tokenised securities limits

The group, which includes Axiology, Securitize and SIX Digital Exchange (SDX), on Monday said in a letter to members of the European Parliament and Council that the European Commission’s proposal to increase the cap under the Distributed Ledger Technology Pilot Regime (DLTPR) from €6 billion (£5.2bn) to as much as €100 billion would be insufficient for large-scale adoption.

“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,” said Marius Jurgilas, chief executive of Lithuania-based fintech firm Axiology, in a release. “A €100 billion ceiling may look generous on paper, but for market infrastructure it could quickly become a brake on investment and scale.”

Jurgilas added: “The EU now has an opportunity to give regulated DLT markets the headroom to compete globally, while making sure new entrants are playing by the same rules as incumbent infrastructure.”

The firms said some existing European projects already hold volumes reaching €350 billion and are planning further growth, arguing that the proposed €100 billion ceiling could unnecessarily restrict European projects. The thresholds are based on market capitalisation rather than trading volume.

Axiology is also directly involved in the Eurosystem’s work on tokenised market infrastructure. The firm joined the ECB’s Pontes and Appia initiatives in August, becoming one of four DLT operators included on the Pontes list alongside Clearstream, SWIAT and Cashlink. Axiology is progressing through testing and certification ahead of the initiative’s initial launch on September 21, although its production participation remains subject to regulatory approval.

Industry calls for €1.5tn threshold

The coalition’s preferred option is for EU co-legislators to remove the overall cap on the value of financial instruments admitted to trading on DLT infrastructure under the regular regime.

If policymakers retain a quantitative limit, the firms recommended €1.5 trillion as a baseline, saying the threshold should provide sufficient capacity for sustained market growth.

The group also called for the European Commission to be given powers to increase thresholds in response to market developments without being constrained by a predetermined maximum. It argued that fixed ceilings could reduce regulatory certainty for firms making long-term investment decisions in tokenised market infrastructure.

Firms warn over uneven DLT rules

The signatories also opposed proposals that could apply different limits to DLT market infrastructures and incumbent central securities depositories (CSDs).

The letter cited a potential €100 billion threshold, which could rise to €250 billion, for DLT market infrastructures compared with a €500 billion threshold, potentially rising to €1 trillion, for CSDs designated under the Settlement Finality Directive.

The coalition said such a structure would create unequal business and investment opportunities and could hinder newer market infrastructure providers from scaling.

The September 7 letter was addressed to members of the European Council and European Parliament’s Committee on Economic and Monetary Affairs as part of discussions around revisions to the DLT Pilot Regime under the Market Integration and Supervision Package.

The push comes the European Central Bank (ECB) in August identified collateral management as a key component of its plans for an integrated European tokenised financial market, alongside technical standards, interoperability and cross-border connectivity. The ECB is also preparing its Pontes project to connect DLT platforms with existing Eurosystem TARGET Services, while its longer-term Appia initiative is targeting a blueprint for an integrated European tokenised financial ecosystem by 2028.