A coalition of European tokenization companies has urged European Union policymakers to revisit the bloc’s Distributed Ledger Technology Pilot Regime, arguing that current constraints are limiting growth and discouraging broader participation in digital capital markets.
According to industry reports, the joint letter was signed by firms including 21X, Central Securities Depository Prague, Boerse Stuttgart Group, Lise, Axiology and several other digital asset infrastructure providers. The group is calling for targeted revisions to the EU’s regulatory sandbox framework for distributed ledger based market infrastructure, warning that restrictive thresholds risk pushing innovation and liquidity to other jurisdictions.
The DLT Pilot Regime was introduced as a controlled environment allowing market participants to test blockchain based trading and settlement of financial instruments. However, signatories contend that tight asset eligibility criteria and volume caps are limiting its practical impact. Under the current framework, eligible shares are restricted to issuers with a market capitalization below 500 million euros, while bond issuances are capped at 1 billion euros.
In addition, the regime imposes an aggregate market value ceiling of 9 billion euros across DLT market infrastructures operating within the sandbox. The letter proposes increasing this threshold significantly, suggesting a new limit of up to 150 billion euros to better reflect the scale of European capital markets.
Another key concern raised by the companies relates to licensing timelines. The existing framework includes a six year limit on granted authorizations under the pilot. Industry participants argue that this temporal restriction creates uncertainty for long term infrastructure investments, particularly for firms building tokenized securities platforms that require sustained regulatory clarity to attract institutional capital.
The group describes its recommendations as quick fixes that would be minimally invasive yet strategically important. Without timely adjustments, the signatories warn that the EU risks falling behind more agile jurisdictions in the development of digital asset market infrastructure. They point to growing tokenization activity in the United States and other global financial centers as evidence that competitive pressures are intensifying.
Tokenization, which involves representing traditional financial assets such as shares and bonds on blockchain networks, has been promoted as a way to enhance settlement efficiency, transparency and cross border access. Major asset managers and exchanges globally have begun exploring tokenized funds, government securities and private market instruments.
European policymakers have emphasized investor protection and financial stability in shaping the DLT Pilot framework. Industry participants, however, argue that calibrated flexibility is essential to ensure that Europe remains competitive in emerging financial technologies.
As discussions continue, the outcome of the proposed revisions could shape the trajectory of tokenized capital markets within the European Union and influence how quickly blockchain based infrastructure moves from sandbox experimentation to mainstream adoption.
