Industry warns EU could cede tokenization leadership to the U.S.

Eight Europe‑based regulated digital‑asset firms have publicly urged EU policymakers to accelerate and broaden reforms to the bloc’s distributed‑ledger pilot framework to prevent a structural migration of tokenized capital‑market activity to the United States. The group argues the current pilot regime combines restrictive asset permissions, a relatively low transaction‑volume ceiling and a six‑year sunset on pilot licences — constraints they say make scaling impractical and deter institutional market‑makers and custodians. By contrast, U.S. market participants have secured pockets of regulatory forbearance and are building production‑ready tokenized settlement stacks; industry observers see a plausible path for American exchanges and clearinghouses to operationalize higher‑volume, T+0 settlement rails within two to three years. Supporters of the firms’ proposals point to Europe’s broader MiCA and single‑market licensing architecture as a strategic advantage — legal clarity and passporting can attract domiciled balance‑sheet holders — but caution that legal certainty alone will not create tradable, deep markets without commensurate throughput, finality and ordering guarantees. Technical limitations (sustained throughput, latency and uncertain finality) and emergent middleware concentration — among custody providers, sequencers and stablecoin issuers — already threaten to concentrate execution and distribution advantages on a few non‑interoperable rails. To preserve a European hub, the signatories recommend expanding eligible asset classes to include scaled real‑world assets, raising the pilot transaction cap from current low single‑digit billions toward a €100–150 billion band, and removing the six‑year licence ceiling so platforms can operate continuously while regulatory supervision matures. They also call for parallel work to harden interoperability, surveillance tooling and custody harmonisation so increased on‑chain volumes do not create concentrated operational risk. Regulators face a policy choice between preserving a conservative, time‑limited sandbox that limits systemic exposure and liberalizing the regime to retain market share and the ecosystems that form around live markets. If substantive amendments are delayed until the EU’s wider Market Integration and Supervision Package (MISP) takes full effect by 2030, the groups warn that liquidity, cloud partnerships and ancillary services may already have consolidated around U.S. rails, reducing the euro’s role in tokenized intermediation. The debate underscores that preserving future market relevance depends as much on incentive‑compatible regulatory design and technical standards as on legal authorisation alone.