EU Tokenisation Firms Call for Quick Amendments to DLT Pilot Rules as US Moves Toward Large‑Scale On‑Chain Settlement
Brussels, 28 April 2024 – A coalition of European token‑issuers and market‑infrastructure providers has pressed EU legislators to fast‑track a set of technical tweaks to the Distributed Ledger Technology (DLT) Pilot Regime. The group argues that the present asset‑type restrictions, issuance caps and the six‑year licence limit are hampering the development of regulated on‑chain markets, while the United States is rapidly building a framework that could enable industrial‑scale tokenisation and near‑instant settlement.
Who is speaking out?
The joint letter, drafted ahead of an upcoming debate in the European Parliament, is signed by Securitize, 21X, Boerse Stuttgart Group, Lise, OpenBrick, STX and Axiology. These firms operate tokenised securities platforms, custodial services and related trading infrastructure across Europe and beyond.
What the letter says
The signatories acknowledge that the broader Market Integration and Supervision Package charts a sensible long‑term direction for European capital markets. However, they warn that the current DLT Pilot Regime – the EU’s sandbox for tokenised securities – imposes constraints that could cause Europe to lose its competitive edge.
Key points from the letter include:
- Asset‑scope limitations – only a narrow list of securities may be tokenised under the pilot, excluding many real‑world assets that are already being digitised elsewhere.
- Issuance volume caps – strict ceilings on the amount of tokens that can be issued per project restrict the ability to launch sizeable offerings.
- Time‑bound licences – a six‑year expiry on pilot authorisations forces operators to restructure or abandon projects before they reach scale.
The authors contend that without prompt adjustments, Europe risks handing over global liquidity to the United States, where regulators and exchanges are laying down clearer rules for on‑chain securities.
The proposed “quick fix”
Rather than a wholesale deregulation, the companies suggest a narrowly targeted technical amendment that would:
- Broaden the class of eligible assets, allowing a wider range of tokenised securities and real‑world assets (RWA).
- Lift existing issuance caps, enabling larger token offerings that match the size of traditional capital‑raising programmes.
- Eliminate the six‑year licence ceiling, giving pilots the flexibility to run for longer periods while still respecting investor protection standards.
The coalition argues that these changes could be implemented through a stand‑alone update to the DLT Pilot Regime, avoiding the need to reopen the extensive market‑structure reforms that are slated for full application only around 2030.
Why the United States matters
The letter points to a series of recent U.S. developments that illustrate a more advanced regulatory approach:
- SEC guidance – In December 2025 the Securities and Exchange Commission’s Trading and Markets Division published detailed instructions on how broker‑dealers may custody tokenised stocks and bonds under existing investor‑protection rules.
- DTCC no‑action letter – The same month the Depository Trust & Clearing Corporation received SEC clearance to launch a service that tokenises assets already held in its DTC custody system.
- Clear categorisation – In late January 2025 the SEC issued guidance dividing tokenised securities into “issuer‑tokenised” and “third‑party tokenised” categories, providing a clearer regulatory map for market participants.
- Exchange initiatives – Nasdaq and the New York Stock Exchange have both signalled concrete plans to integrate tokenised equities and ETFs into their trading platforms, with the NYSE targeting a blockchain‑based, 24/7 trading solution that promises near‑instant settlement.
These steps collectively signal that U.S. market participants may soon be able to issue, trade and settle tokenised assets at a scale that could outpace European pilots if the EU’s sandbox remains constrained.
Analysis
The EU’s tokenisation strategy is at a crossroads. The Market Integration and Supervision Package is praised for its ambition but is unlikely to be fully operational before the end of the decade. In the interim, the DLT Pilot Regime is the only regulatory vehicle that permits the issuance of tokenised securities to the public.
By keeping the sandbox’s parameters tight, EU policymakers may have unintentionally created a “regulatory lag” that could push innovators toward jurisdictions with clearer, more permissive rules. The coalition’s request for a limited technical amendment is a pragmatic attempt to bridge the gap without jeopardising investor safeguards.
If the European Commission adopts the suggested changes quickly, it could:
- Retain existing market players that are currently operating on pilot licences and prevent a migration of tokenised‑asset pipelines to the U.S.
- Stimulate liquidity by permitting larger token offerings, which in turn could attract institutional investors looking for on‑chain exposure.
- Signal regulatory agility, reinforcing the perception that Europe can adapt its framework to fast‑moving fintech developments.
Conversely, postponing action could cement a perception of regulatory inertia, making it harder for Europe to attract tokenisation projects once the broader reforms finally take effect.
Key Takeaways
| Issue | Current Situation | Proposed Change | Potential Impact |
|---|---|---|---|
| Asset eligibility | Limited to a small list of securities | Expand to include a broader set of tokenised assets, especially RWAs | Greater diversity of offerings, higher market depth |
| Issuance limits | Strict caps on token volume per project | Raise or remove caps | Ability to launch larger, more attractive tokenised fundraisings |
| Licence term | Six‑year maximum for pilot licences | Remove the time ceiling | Longer‑term project planning and scaling without forced restructuring |
| Regulatory timeline | Full market‑structure reforms not expected until ~2030 | Stand‑alone technical update now | Faster alignment with global developments, preserving EU market relevance |
| Competitive pressure | US regulators providing clearer guidance and more permissive environments | Align EU sandbox rules with emerging global best practices | Mitigate risk of capital flight to U.S. markets |
Outlook
The European Parliament’s forthcoming debate will be pivotal. Should policymakers embrace the coalition’s “quick fix,” the EU could preserve its foothold in the nascent tokenised securities market and demonstrate a willingness to adapt regulatory sandboxes to real‑world market dynamics. Failure to act, however, may turn Europe into a peripheral player while the United States consolidates its lead in on‑chain settlement and tokenisation at scale.
Source: https://cointelegraph.com/news/eu-tokenization-dlt-pilot-rules-risk-pushing-onchain-markets-us?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
