The race to modernize capital markets with blockchain is heating up — and Europe could blow its early lead to the United States, a group of blockchain firms warned in a letter Thursday.
Eight EU-regulated digital asset firms – Securitize, 21X, Boerse Stuttgart Group’s Seturion, Central Securities Depository, Lise, OpenBrick, STX and Axiology – are calling on policymakers to speed up changes to the bloc’s distributed ledger technology Pilot regime, saying current restrictions are starting to hold back US regions just as the US region is contracting.
“While Europe ponders, the US has already acted and is on course to own the digital rails of the future global economy,” the firms said in the letter.
Tokenization refers to the process of issuing real-world assets such as stocks, bonds, or funds as blockchain-based tokens. Industry backers see it as a way to dramatically improve settlement speed, increase transparency and unlock shared ownership. It’s potentially a huge market: several reports suggest that tokenized assets could swell to several trillion dollars over the next few years.
The EU was among the early movers to introduce a legal framework for tokenized financial infrastructure, but its regulatory sandbox – the DLT Pilot Regime – was designed with cautious boundaries. The companies behind the letter claim that these limits now risk turning the EU’s tokenization lead into a “success trap” while the US is on the fast track.
The US Securities and Exchange Commission (SEC) recently issued a no-action letter to DTCC, the nation’s largest settlement firm, paving the way for full-scale tokenized settlement. A T+0 (instant settlement) market could be live in the US as early as 2026, with exchange operators Nasdaq and the New York Stock Exchange laying plans for round-the-clock trading of tokenized securities. CME Group, which runs a major derivatives trading venue for Wall Street firms, is partnering with Google on a tokenized cash security with plans to launch later this year.
That would give the US a four-year head start before the EU’s broader market integration and supervision package (MISP) comes into effect in 2030, the letter warned.
The group proposed changes to the framework to avoid this scenario. That includes removing restrictions on which assets can be tokenized, raising the transaction volume limit to €100 billion to €150 billion from the pilot’s €6 billion to €9 billion limit and eliminating the six-year limit on licenses.
“If Europe remains constrained until 2030, global liquidity will not wait – it will migrate permanently to US markets, also undermining the euro’s competitiveness through regulation rather than technology,” the letter said. “The EU must act now to avoid repeating the mistakes of its capital market history.”
