European capital flight warning due to US slowdown
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In a joint statement released on the 6th, European tokenization and market infrastructure companies warned EU lawmakers that regulated on-chain financial markets could migrate to the United States if the DLT pilot system is not swiftly revised. They pointed out that current asset limits, trading volume caps, and restrictive licensing structures are hindering the growth of the tokenized securities market.
The joint letter was signed by European tokenization and trading infrastructure companies Securitize, 21X, Boerse Stuttgart Group, Lise, OpenBrick, STX, and Axiology. They stated that while the DLT pilot framework is meaningful as a regulatory sandbox for the EU, the current structure limits the expansion of already regulated tokenized products.
The companies emphasized that the issue could be resolved through technological adjustments, rather than a complete legislative overhaul. Specifically, they argued that investor protections should be maintained while allowing market growth by expanding the scope of eligible assets, raising issuance limits, and abolishing the six-year limit on pilot licenses. They explained that these changes could be implemented quickly as standalone technical updates.
The United States is accelerating the establishment of a tokenization system.
The reason European companies cited the US as a key case study stems from recent actions by US regulators and exchanges. On December 11th, the US Securities and Exchange Commission (SEC) clarified that tokenized stocks and bonds can be issued, stored, and settled within the existing securities regulatory framework. On the same day, a no-action letter was issued to a subsidiary of the Depository Trust and Clearing Corporation (DTCC) for its tokenized securities services.
On January 28th, the SEC further alleviated regulatory uncertainty by issuing guidance classifying tokenized securities based on their issuer. Furthermore, Nasdaq and the New York Stock Exchange (NYSE) are pursuing plans to allow trading of tokenized stocks and exchange-traded funds (ETFs) within traditional market infrastructure.
European tokenization companies warned that the EU could lose its market leadership if regulatory delays continue, as "on-chain payment infrastructure is maturing," and that global liquidity will not wait. They emphasized that the revision of the DLT pilot system will be a key turning point in preserving the competitiveness of European capital markets.
Reporter Jeong Ha-yeon yomwork8824@blockstreet.co.kr
