Industry Coalition Presses Brussels to Lift Tokenized-Asset Ceilings Under DLT Pilot Regime

Industry Coalition Presses Brussels to Lift Tokenized-Asset Ceilings

A broad coalition of European financial industry groups is calling on EU policymakers to raise the transaction-volume thresholds permitted under the DLT Pilot Regime, warning that the current caps risk choking off the development of tokenized capital markets before they have had a meaningful chance to mature.

The Association for the Development of Digital Assets (ADAN), together with 27 co-signatories spanning the European financial and digital-asset sectors, issued a joint statement pressing the European Commission to authorise higher transaction volumes as part of the ongoing Market Integration and Supervision Package — a legislative bundle the Commission has been advancing to modernise and consolidate EU financial market rules. ADAN confirmed the coalition's position in a press release dated Tuesday, 8 September.

What the DLT Pilot Regime Does — and Where It Falls Short

The DLT Pilot Regime, which entered into force in 2023 under Regulation (EU) 2022/858, established a temporary, controlled environment allowing market infrastructures — including DLT-based multilateral trading facilities and settlement systems — to operate under regulatory exemptions not available in the standard EU rulebook. The purpose was explicitly experimental: to let supervised participants trade and settle tokenized securities on distributed ledgers while regulators and the industry gathered real-world data.

The European Securities and Markets Authority (ESMA) oversees the regime and has published guidance on the conditions operators must meet to receive permission. However, the regime imposes per-infrastructure caps on the aggregate market value of tokenized instruments that can be admitted to trading or recorded, and it is precisely those ceilings that the ADAN coalition says have become a structural bottleneck.

According to the coalition's public position, the thresholds as currently configured — and as proposed to be carried forward or modified under MISP — are too low to attract the scale of activity needed to make tokenized market infrastructure commercially viable. The groups argue that without headroom to operate at meaningful volumes, DLT-based venues cannot compete with conventional infrastructure, undermining the regime's own stated goal of building an evidence base for broader regulatory reform.

"The current caps prevent the DLT Pilot Regime from fulfilling its purpose: if authorised volumes are too small to run a credible business, operators will not invest, and regulators will never accumulate the market data needed to move tokenization into the mainstream."

— Editorial interpretation of the ADAN coalition's stated position; no direct quote from a named executive has been verified.

Why MISP Is the Pressure Point

The Market Integration and Supervision Package represents one of the Commission's most consequential near-term legislative vehicles for financial markets, bundling reviews of several existing frameworks. For the digital-assets industry, MISP is the live opportunity to renegotiate the Pilot Regime's operating parameters before they are either extended or made permanent.

That timing explains the urgency behind the coalition letter. If MISP advances without amendments to the volume caps, the industry's next opportunity to press for change could be years away — well after momentum in tokenized bond and fund markets has either consolidated or dispersed.

ADAN's 27 co-signatories represent a cross-border coalition, reflecting the degree to which tokenized securities infrastructure is being built — or planned — across multiple EU jurisdictions simultaneously. The breadth of support is itself a signal to Commission and Parliament staff that the concern is not narrow or jurisdiction-specific.

The Regulatory Dilemma

Regulators face a genuine tension here. The Pilot Regime was designed with conservative thresholds partly to limit systemic risk while the technology and its operational risks remain incompletely understood. Lifting caps substantially before settlement failures, custody incidents or liquidity events have been stress-tested at scale carries real prudential considerations — a point ESMA and national competent authorities are unlikely to dismiss.

At the same time, a sandbox that cannot be used at commercially relevant scale generates limited data and limited competitive pressure on incumbent infrastructure — arguably the opposite of what the regime was designed to achieve. The coalition's argument is, at its core, that the current calibration defeats the experiment's own purpose.

What Comes Next

The MISP legislative process is ongoing, with the European Parliament's relevant committees expected to produce reports and amendments in due course. Whether ADAN's coalition push translates into concrete threshold revisions will depend significantly on how sympathetic rapporteurs and Council working groups are to the commercial-viability argument — and how willing supervisors are to accept accelerated scaling of infrastructure they are still learning to oversee.

For now, the industry has staked out its position publicly and with notable breadth of backing. The Commission's response, when it comes, will be an early indicator of how aggressively the EU intends to compete in the global race to build regulated tokenized capital markets.