A coalition of 39 financial and technology firms is pressing Brussels to move faster on distributed-ledger market rules, arguing that Europe risks losing momentum in tokenized finance if the DLT Pilot Regime remains tied to slower legislative timelines. The signatories asked EU institutions to carve the regime out of the wider Market Integration and Supervision Package so reforms can be handled more quickly rather than being absorbed into a much larger negotiation cycle.
The pressure lands on a framework that is already live but still limited. The DLT Pilot Regime was enacted in June 2022 and has applied across the EU since March 23, 2023, giving firms a controlled legal structure to test trading and settlement of tokenized financial instruments. The European Commission itself acknowledged this week that participation has been modest so far and said it has already proposed extending the regime’s duration and scope as part of its broader market-integration agenda. That means the industry is no longer asking Brussels to start the review, but to speed up and deepen it.
The Core Complaint Is That the Pilot Is Too Small and Too Temporary
The coalition wants several concrete changes: removal of current asset-class restrictions, a sharp increase in the overall testing ceiling to as much as €150 billion, elimination of time limits on licenses, and mandatory interoperability standards so tokenized venues do not evolve into isolated settlement silos. Existing limits are one of the central complaints. Under the current regime, the aggregate market value of DLT financial instruments admitted to trading or recorded on a DLT market infrastructure must not exceed €6 billion, a threshold critics say is too restrictive for meaningful scale. The market’s frustration is essentially that Europe built a sandbox, but one that is still too small to attract sustained institutional migration.
The U.S. Comparison Is Now a Political Lever
The coalition’s warning is sharpened by what it sees as faster progress in the United States. Reports tied the appeal to recent U.S. developments that, in the view of signatories, have given broker-dealers and market infrastructure providers a more practical route into tokenized securities and custody. Whether or not Europe agrees with that framing, the competitive argument is now being used as leverage to force a quicker EU response, especially by firms that fear the current package could delay meaningful scaling until the end of the decade.
The significance is immediate even before any law changes. If Brussels accepts a faster carve-out and expands the regime materially, tokenized issuance, custody and settlement activity in Europe could become more commercially viable much sooner. If it does not, firms may keep treating the bloc as a cautious test market rather than as a primary venue for scaled tokenized finance. The real issue is not whether Europe has a DLT regime, but whether that regime can evolve fast enough to matter while the market is still being built.