EU Firms Push to Scrap Limits on Blockchain-Based Assets

Major finance groups ask the EU to remove a proposed 100 billion euro cap on tokenized assets, warning Europe risks losing ground to the US.

A group of big European finance companies is asking EU lawmakers to remove strict limits on assets that can be moved onto blockchain technology — or at least raise those limits sharply.

First, let's explain the key idea. Tokenization means taking a real-world asset (like a stock or a bond) and turning it into a digital token that can be traded on a blockchain (a secure online system that records transactions). This can make trading faster and cheaper.

The EU currently runs something called the DLT Pilot Regime — a test program started in 2023 that lets financial firms experiment with blockchain-based trading while skipping some normal rules. But it comes with a limit on how much value can be handled.

Here are the key numbers:

The current cap is 6 billion euros
The EU wants to raise it to 100 billion euros (about $116 billion)
The industry says even that is too low and wants it removed entirely, or set at a baseline of 500 billion euros
Some European projects already reach 350 billion euros in scale

The letter, dated Sept. 7, was signed by well-known names including Nasdaq, Boerse Stuttgart Group, Securitize, and the European Ethereum Institute.

Their biggest worry? Competition from the United States. In the US, a major settlement platform can tokenize stocks and other assets with no volume limits at all — potentially covering up to 150 trillion euros. The groups fear that if Europe stays too strict, business and money (called "liquidity") will flow to America instead.

Importantly, the letter notes the caps apply to the market value of assets placed on blockchain systems — not daily trading amounts — which makes the 100 billion euro limit look tiny next to the world's massive stock markets.

In short: European finance heavyweights are pressuring regulators to loosen the rules quickly, arguing that outdated limits could push innovation and investment overseas.

This is an AI-generated summary. Read the original article at: https://cointelegraph.com/news/european-finance-groups-urge-eu-to-scrap-tokenized-securities-cap-propose-15t-fallback?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound