The Clock is Ticking: The EU Must Save its Capital Markets

Yesterday, Token City stood united with leading DLT market operators across Europe—including 21X, Securitize, Boerse Stuttgart Digital, and others—to send a clear, urgent message to the European Commission, Parliament, and Council: We need a "Quick-Fix" for the DLT Pilot Regime, and we need it soon.

Read the joint letter here.

For years, Europe has prided itself on being a regulatory pioneer. With the Market Integration and Supervision Package (MISP), the EU correctly identified Distributed Ledger Technology (DLT) as the backbone of future capital markets. But while we have the right architectural vision, we are failing on the only variable that matters in a digital economy: timing.

The Time Trap and the American Surge

The harsh reality is that while Europe deliberates, the United States is executing.

The US has laid the groundwork for tokenization at scale. Through decisive measures, such as the SEC’s No-Action Letter to the DTCC, American markets are on track for fully digital, T+0 settlement by 2026. Meanwhile, the structural inertia of the MISP package means that effective changes within the EU might not arrive until 2030.

This creates a four-year window of regulatory arbitrage during which global liquidity will inevitably migrate to more efficient jurisdictions. If we remain constrained by the current limitations of the DLT Pilot Regime during this period, we face not just a temporary setback, but the risk of a permanent loss of market relevance and a severe blow to the international standing of the euro.

Our Call for a "Quick-Fix"

We are not asking for deregulation. We are asking for a technical update to enable the EU to compete in a critical area for the future of our capital markets.

In alliance with other DLT Pilot Regime operators and applicants, we have formally requested three undisputed and minimally invasive adjustments to be passed as a standalone Technical Update Regulation or as a part of a smaller legislative package within six months and without transition period.

1.  We must expand the scope of eligible assets, going beyond the current restrictions to cover all financial instruments. Expanding this scope does not compromise investor protection, as we already comply with robust MiFID II provisions.

2. Real Liquidity Requires Real Volume. The current volume cap of €6-9 billion is restrictively low for a continental market. We are calling for this cap to be raised to €100-150 billion—approximately 1% of the EU equity market. This is the minimum threshold required to build deep, competitive pools of liquidity.

3. Certainty for the Future. Removing the six-year limitation on DLT licenses. To attract long-term capital and institutional participation, we need permanent regulatory certainty.

Let’s make our DLT Regime the foundation of Europe’s digital future.