A coalition of European crypto and financial associations, joined by exchange operators Nasdaq and Börse Stuttgart, has sent a joint letter to the European Council and the European Parliament demanding a revision of the caps imposed on the EU's DLT Pilot Regime, the framework that allows platforms to test trading and settlement of tokenised stocks, bonds and investment funds under exemption from certain financial market rules.
The signatories, who also include Adan, the French Digital Asset Association, the Crypto Council for Innovation and the European Ethereum Institute, want the existing limits either abolished entirely or raised to at least €1.5 trillion. The demand puts them at odds with the European Commission, which has already proposed lifting the threshold from €6 billion to €100 billion.
For the coalition, that increase does not go far enough. The group argues that the proposed thresholds refer to the market value of approved instruments rather than actual trading volume, a distinction it says effectively caps the operational capacity of any platform participating in the regime regardless of how much trading activity it could otherwise handle.
Looking to the US
The letter draws a direct comparison with the United States, where the coalition notes that dominant settlement platforms are able to tokenise securities without facing corresponding volume limits. The implicit argument is that European platforms risk being structurally disadvantaged against US counterparts operating under a lighter-touch regime, at a moment when tokenisation of traditional securities is drawing growing institutional interest on both sides of the Atlantic.
Should EU lawmakers decide to retain a cap in some form, the coalition has proposed a fallback: a dynamic adjustment mechanism that would give the European Commission the authority to raise limits in line with market growth, rather than fixing rigid statutory ceilings that would need separate legislative action to revise.
What happens next
The DLT Pilot Regime was designed as a sandbox to let regulators and market participants gain experience with distributed ledger technology in securities markets before any permanent rules are drafted. The scale of the caps under discussion will determine how far exchanges and infrastructure providers can actually go in testing tokenised markets at institutional volume, rather than in limited pilot form.
The letter now sits with the European Council and Parliament, both of which will need to weigh the coalition's request against the Commission's existing proposal as the file moves through the EU's legislative process.
