ADAN Coalition Urges EU To Raise €6 Billion DLT Pilot Regime Caps

ADAN and 27 partner organizations urged EU policymakers on Sept. 8 to raise transaction volume caps under the DLT Pilot Regime, warning that current limits will stifle tokenized assets. The call, delivered within the context of the European Commission's Market Integration and Supervision Package review, argues that the regime's thresholds are too low to accommodate meaningful market activity.

The Association for the Development of Digital Assets, known as ADAN, represents French and European digital asset professionals. Its coalition letter frames the existing caps as a structural barrier to the growth of tokenized securities markets across the European Union. The specific volume levels requested by the coalition have not been disclosed in the available public record.

Current DLT Pilot Regime Caps Cap Tokenized Asset Volumes At €6 Billion Per Issuer

The DLT Pilot Regime, which became applicable across the European Union in March 2023, establishes a controlled environment for trading and settling tokenized financial instruments using distributed ledger technology. Under the regime's technical standards, transaction volumes are capped at €6 billion per issuer for tokenized equities, bonds, and fund units.

The €6 billion threshold applies to the aggregate market value of financial instruments admitted to trading or recorded on a DLT market infrastructure. For DLT multilateral trading facilities, the cap is set at €6 billion in total market capitalization across all admitted instruments. DLT settlement systems face a €6 billion cap on the aggregate value of transactions settled.

These limits were designed as a safeguard mechanism. The European Securities and Markets Authority, ESMA, which drafted the technical standards underpinning the regime, framed the caps as a way to contain potential risks while the pilot operated. The pilot was originally scheduled to run for up to six years, with a review mechanism built into the legislation.

Industry participants have consistently argued that the €6 billion ceiling is too restrictive. A single large corporate bond issuance or a modestly sized equity listing can consume a significant portion of the allowance. For tokenization platforms seeking to attract institutional issuers, the cap creates uncertainty about whether they can scale operations within the pilot's boundaries.

The regime also imposes per-issuer limits that are lower than the aggregate caps. For tokenized equities, the market capitalization of any single issuer cannot exceed €500 million. For tokenized bonds, the issuance limit per issuer is €1 billion. These sub-limits further constrain the practical utility of the pilot for larger corporate issuers.

ADAN And 27 Partners Demand Higher Caps Within EU Market Integration And Supervision Package

The Sept. 8 intervention from ADAN and its 27 partners targets the European Commission's Market Integration and Supervision Package, known as MISP. This legislative package, under review in 2026, addresses multiple aspects of EU financial market regulation, including potential amendments to the DLT Pilot Regime.

The coalition's core demand is straightforward: authorize higher transaction volumes under the pilot. The letter argues that without meaningful increases to the caps, the regime will fail to achieve its stated objective of testing tokenized asset infrastructure at scale. The specific higher volume levels proposed by the coalition have not been made public.

The identity of the 27 partner organizations has not been fully disclosed in the available public record. ADAN's membership includes major European crypto and digital asset firms, and the coalition likely draws from exchanges, custodians, tokenization platforms, and industry associations across multiple EU member states. The absence of a published signatory list represents a gap in the public record.

The timing of the letter is significant. The MISP review represents the first legislative opportunity to amend the DLT Pilot Regime's parameters since its launch. Industry groups have been positioning for this review since the pilot's early months, when initial uptake proved slower than anticipated.

The coalition's warning that current limits "will stifle tokenized assets" reflects a broader industry concern. Tokenization advocates argue that the EU risks falling behind other jurisdictions, including Switzerland and Singapore, which have adopted more flexible frameworks for digital asset market infrastructure.

European Commission And ESMA Signal Openness To Reviewing DLT Pilot Regime Limits

The European Commission has indicated openness to reviewing the DLT Pilot Regime's parameters as part of the MISP process. Official statements from the Commission have acknowledged that the pilot's uptake has been limited and that adjustments may be necessary to achieve the regime's objectives.

ESMA has similarly signaled willingness to revisit the technical standards that implement the caps. In its monitoring reports on the pilot, ESMA has noted the low number of applications for DLT market infrastructure licenses. As of the most recent reporting period, only a handful of entities had been authorized across the EU.

The Commission's MISP review documents have not yet included specific proposals to raise the €6 billion threshold. The legislative process remains in its early stages, with the Commission expected to publish formal proposals before the European Parliament and Council begin their respective readings.

The regulatory tone has shifted since the pilot's launch. Early communications emphasized caution and the need for safeguards. More recent statements from both the Commission and ESMA have acknowledged that the caps may need recalibration to make the pilot a meaningful test of tokenized market infrastructure.

Industry Counterarguments Warn Raising Caps Could Increase Systemic Risk In Tokenized Markets

Not all stakeholders support raising the caps. Some regulators and academics have cautioned that higher volume limits could amplify systemic risks in tokenized markets. The concern centers on the interaction between DLT-based settlement and traditional financial market infrastructure.

The counterargument holds that the €6 billion cap serves as a circuit breaker. If a DLT settlement system experienced operational failure or a security breach, the cap limits the potential contagion to the broader financial system. Raising the cap without corresponding enhancements to operational resilience standards could increase the stakes of any failure.

Academic commentary on the DLT Pilot Regime has noted that tokenized markets remain relatively untested at scale. The absence of a full market cycle through the pilot means that risk models are based on limited empirical data. Some researchers argue that the caps should remain in place until more evidence accumulates.

ESMA's own risk assessments have emphasized the importance of maintaining safeguards during the pilot phase. The authority's technical standards were designed with conservative thresholds precisely because the technology's behavior under stress conditions was not yet well understood.

The debate reflects a fundamental tension in financial regulation: the desire to foster innovation against the imperative to protect market stability. The ADAN coalition argues that the current balance is too conservative. Regulators and academics urging caution argue that the balance should shift only gradually.

EU Parliament And Council Debate Timeline For DLT Pilot Regime Amendments

The legislative path for amending the DLT Pilot Regime runs through the standard EU co-decision procedure. The European Commission must first publish its formal MISP proposals. The European Parliament and the Council of the EU will then each adopt their positions before entering trilogue negotiations.

No specific dates for Parliament votes on DLT Pilot Regime amendments have been scheduled as of the current reporting period. The MISP package is complex, covering multiple regulatory areas beyond the DLT pilot, which means the timeline for individual provisions remains uncertain.

The trilogue negotiations, where Parliament, Council, and Commission representatives reconcile their positions, are expected to occur after both co-legislators have adopted their respective mandates. Industry observers anticipate that the DLT Pilot Regime provisions will be among the more contested elements of the package.

The coalition's Sept. 8 letter is best understood as an opening move in a longer legislative campaign. By staking out its position early, ADAN and its partners aim to influence the Commission's drafting process before formal proposals are published.

The next concrete signal to watch is the Commission's publication of the MISP legislative text. That document will reveal whether the Commission intends to raise the DLT Pilot Regime caps, and by how much. Until that text appears, the specific volume levels under discussion remain a matter of private negotiation between industry and policymakers.