A consortium of eight EU-regulated digital asset firms has issued a stark warning to European policymakers: the bloc risks squandering its early lead in tokenization and falling decisively behind the United States in the race to modernize capital markets with blockchain technology. In a letter sent on Thursday, the firms urged fast-track changes to the EU's Distributed Ledger Technology (DLT) Pilot Regime, arguing its current limitations are crippling regional innovation just as the U.S. begins to move aggressively.
The firms behind the warning include Securitize, 21X, Boerse Stuttgart Group's Seturion, Central Securities Depository, Lise, OpenBrick, STX, and Axiology. They contend that while Europe deliberates, "the U.S. has already acted and is on track to own the digital rails of the future global economy." Tokenization, the process of issuing real-world assets like stocks, bonds, or funds as blockchain-based tokens, is seen as a multi-trillion dollar market that can dramatically improve settlement speeds, transparency, and enable fractional ownership.
The EU was an early mover, introducing the DLT Pilot Regime as a regulatory sandbox. However, the firms argue its cautious design—with restrictions on eligible assets, a transaction volume cap of only €6-9 billion, and a six-year license limitation—now risks turning Europe's lead into a "success trap."
Meanwhile, U.S. advancement is rapid and concrete. The U.S. Securities and Exchange Commission (SEC) recently granted a no-action letter to the Depository Trust & Clearing Corporation (DTCC), clearing the way for full-scale tokenized settlement. Major exchange operators Nasdaq and the New York Stock Exchange have laid out plans for around-the-clock trading with tokenized securities, with a T+0 (instant settlement) market potentially live as soon as 2026. Furthermore, CME Group is collaborating with Google on a tokenized cash collateral project slated for launch later this year.
The letter warns this momentum could give the U.S. a four-year head start before the EU's broader Market Integration and Supervision Package (MISP) takes full effect in 2030. To avoid this scenario, the group proposes urgent reforms: removing asset eligibility restrictions, raising the transaction volume cap to €100-150 billion, and eliminating the six-year license limit.
The firms concluded with a dire prediction: "If Europe remains constrained until 2030, global liquidity will not wait — it will migrate permanently to U.S. markets, undermining also the euro’s competitiveness through regulation rather than technology. The EU must act now to avoid repeating the mistakes of its capital markets history."
