27 companies and industry bodies, among them Nasdaq and Boerse Stuttgart Group, are asking EU legislators to scrap the volume cap in the DLT Pilot Regime. The Commission wants to raise it from €6 billion to €100 billion. Far too low, they say.
The DLT Pilot Regime is the EU's trial framework for trading venues and settlement systems that trade and settle financial instruments directly on the blockchain. It caps the total value of the instruments that may be admitted to trading, and the Commission has proposed raising that cap from €6 billion to €100 billion as part of the Market Integration and Supervision Package (MISP).
In a letter, 27 companies and industry bodies ask the Council and the European Parliament's ECON committee to go further. The signatories describe themselves as a broad alliance of both traditional finance and the emerging tokenised assets sector.
The first recommendation comes with two options. The signatories primarily want the cap on the total value of financial instruments admitted to trading on DLT infrastructure removed for the regular regime.
Should quantitative thresholds be judged politically necessary, they must be set at a level that gives operators and investors confidence that the business can be scaled up. The group points to €1,500 billion as an appropriate baseline, a level some policymakers have already floated in the negotiations. By way of comparison, the signatories note that a dominant settlement platform in the US can tokenise US equities and other assets with no volume cap — an amount they put at 150 trillion, or a hundred times the threshold they are asking for.
The signatories stress that the thresholds are calculated on market capitalisation rather than trading volume. €100 billion may look like a substantial figure, but it is modest against global equity markets.
They call the Commission's proposal to lift the cap from €6 billion to €100 billion an important step, but argue it falls short given rapid market developments, particularly in the US. Some European projects already hold volumes reaching €350 billion and are planning further growth. In practice, a €100 billion cap would therefore limit European projects unnecessarily, they write.
If thresholds are retained, the signatories want the legislation to empower the Commission to raise them whenever market developments justify it. That power must not be subject to predetermined maximum caps, which in their view would limit adaptability.
Fixed ceilings would also weaken regulatory certainty for participants making long-term investment decisions. If the Commission's room for manoeuvre is itself constrained by arbitrary numerical limits, market participants may reasonably expect the framework to become obsolete with no scope for timely intervention.
The second recommendation concerns differentiated thresholds. The signatories oppose a model in which DLT market infrastructures face a €100 billion cap, with scope to rise to €250 billion, while central securities depositories designated under the settlement finality directive, SFD, get €500 billion with scope to rise to €1 trillion.
Such a split would create unequal business and investment conditions and hold back new providers of market infrastructure. The principle of same business, same risks, same rules must not be watered down in the pilot regime, they write. The adjustments enjoy broad support among market participants across Europe, is the message to legislators.
Nine of the signatories are companies and market infrastructures: Nasdaq, Boerse Stuttgart Group, 21X, Axiology, Securitize, STX, Cashlink, Dowgo and Lightning Stock Exchange.
The other 18 are industry bodies and networks, among them France's Adan, the European Digital Finance Association, the Crypto Council for Innovation, the Coalition for Tokenized Markets, the European Ethereum Institute, France FinTech, ItaliaFintech, Holland Fintech Association, Spain's AEFI, Germany's Bundesverband für elektronische Wertpapiere and Alastria. From the Nordics, Nasdaq and the Swedish FinTech Association have signed.
Sources: Boerse Stuttgart Group
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