European tokenization companies: "EU DLT regulations threaten to lag behind the US…Swift revisions needed."
Leading European tokenization companies have called for reforms to the European Union's (EU) distributed ledger technology (DLT) pilot regulatory framework. They expressed concern that current asset limits, issuance caps, and time-limited licensing structures are significantly slowing market expansion compared to the United States.
Leading European market infrastructure companies, including Boerze Stuttgart Group, SecurTize, and STX, have jointly submitted a letter to the European Parliament ahead of an upcoming debate, calling for "technical improvements" to existing pilot regulations. Their key point is that the current regulations effectively block the expansion of tokenized securities products in the European market.
In the letter, they compared the regulatory progress to that of the US and warned that "without swift action on the DLT pilot system, Europe could lose its market leadership." Specifically, they explained that if the current structure continues without regulatory reform for DLT, actual implementation will be delayed until after 2030, which is not a short-term issue but a "critical strategic risk."
"US regulations are accelerating, but Europe is concerned about liquidity outflows."
Rather than demanding deregulation, they proposed "limited technical modifications" that would allow the tokenization market to grow commercially while maintaining investor protections. Specifically, they proposed expanding the scope of assets eligible for pilots, increasing the issuance amount, and removing the six-year limit on pilot licenses.
This request represents a practical approach that can be implemented quickly through independent technical updates, without the need to re-examine the entire EU market structure. They pointed out that continued delays would inevitably weaken the euro's competitiveness in global capital markets. They analyzed that a more rapid response than before is essential, particularly given the trend toward fully digitized issuance and settlement infrastructure.
The SEC has begun developing regulations for the issuance, custody, and settlement of token securities.
Meanwhile, US regulators and exchanges are already accelerating the development of legal and institutional frameworks for tokenized securities. On December 11, 2025, the US Securities and Exchange Commission (SEC) clarified how security tokens can be stored and settled within the existing regulatory framework. On the same day, it issued a "No-Action Letter" to a subsidiary of DTCC, effectively authorizing the launch of a tokenized securities market service.
On January 28th, the SEC divided tokenized securities into "issuer-led" and "third-party-led" types and proposed regulatory application guidelines for each. This is interpreted as a measure to provide a clear legal foundation for tokenization efforts by US companies.
Exchanges are also moving quickly. Nasdaq submitted a proposal to list tokenized stocks in September of last year and is currently in the process of negotiating with regulators. The New York Stock Exchange (NYSE) also announced in late January that it was preparing to allow trading of tokenized stocks and exchange-traded funds (ETFs) on a blockchain-based platform with 24-hour trading.
Europe may be losing in the race against time and speed.
This joint letter isn't simply a call for individual policy changes; it demonstrates the need for regulatory innovation to keep pace with the pace of digitalization in global capital markets. While the US is rapidly integrating tokenization into existing financial market structures, Europe is stuck in experimental regulatory frameworks and risks losing its leadership.
European companies have issued strong warnings about the potential shift of liquidity and industrial base to the United States. There is a growing consensus that rapid overhaul of the regulatory framework and improvement of the testbed environment are essential before a full-scale market transition begins.
💡 "What if regulation stifles innovation? There's a separate 'board' for true players."
While the tokenized securities market is rapidly developing, particularly in the US, Europe remains stuck in the "testbed" phase. While the US SEC has clarified regulations and effectively launched the tokenized securities market, the EU remains hampered by caps on total assets and other restrictions.
In this era where the speed and flexibility of regulation determine the leadership of the digital capital market,
The truth that 'he who understands first leads the market' is becoming clear.
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🔎 Market Interpretation
European tokenization infrastructure companies are strongly calling for regulatory changes to the EU's DLT Pilot Regime. While the US is rapidly moving toward industrial-scale tokenization and near-real-time payment systems, Europe is facing concerns that on-chain market expansion is being hampered by issuance caps, transaction volume restrictions, and a six-year limited license, which could lead to a concentration of global liquidity in the US.
💡 Strategy Points
1. Rapid institutional improvements to the DLT Pilot Regime are necessary to realize the growth potential of the tokenization market in Europe.
2. The key strategy is to reform the system by easing regulatory sandbox restrictions (limits on size and time) while maintaining investor protection measures.
3. It should be noted that the United States is leading the way in both technology and policy, establishing institutional clarity by establishing guidance on the issuance, custody, and settlement of tokenized securities.
📘 Glossary
- DLT Pilot Regime: A tokenized securities regulatory sandbox program established by the EU to test new technologies.
- Tokenization: The process of converting real assets such as stocks and bonds into blockchain-based tokens and making them digitally tradable.
- DTCC: A leading securities settlement institution in the United States, this time it received approval for a real asset tokenization service.
💡 Frequently Asked Questions (FAQ)
Q.
What are the current issues with the DLT Pilot Regime?
The current DLT Pilot Regime has restrictions on asset types, issuance and trading volume limits, and a six-year program duration, making it difficult to expand even existing tokenization platforms. While this is intended to protect investors, it hinders the speed of innovation adoption and market expansion.
Q.
What are the "quick fixes" companies are requesting?
A "quick fix" refers to technical measures that can be implemented within the existing regulatory framework without a complete overhaul. Specifically, these include expanding the scope of assets, raising issuance limits, and abolishing the six-year sandbox operating period. The goal is to enable market expansion within the regulatory framework.
Q.
How is the US regulatory approach different?
In the United States, the SEC is moving to incorporate tokenized securities into the existing securities regulatory framework. For example, guidance is being issued to allow broker-dealers to hold tokenized securities and to tokenize assets, facilitating practical implementation. At the same time, Nasdaq and NYSE are developing tokenization platforms capable of 24-hour trading, fostering the integration of traditional finance and blockchain technology.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
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