EU finance ministers wants DLT Pilot Regime cap raised to €300bn. Lagarde objects
The Council of the EU has proposed a significant expansion of the DLT Pilot Regime, aiming to raise the market capitalization limit for tokenized assets from the current €6 billion to €300 billion per infrastructure. This move, part of the broader Market Integration and Supervision Package (MISP), reflects a push to accelerate the integration of European capital markets through blockchain technology. While the European Commission initially suggested a €100 billion cap, finance ministers are pushing for higher thresholds with potential future increases to €500 billion. Additionally, the Council increased the proposed cap for DLT-based settlement schemes operated by banking groups from €10 billion to €50 billion. However, European Central Bank President Christine Lagarde has formally objected to these higher limits, citing concerns over potential market fragmentation and a lack of interoperability between DLT structures. The debate highlights a tension between industry demands for fewer restrictions and regulatory caution regarding systemic stability. These developments are critical for the RWA market as they define the regulatory ceiling for institutional-grade tokenization projects within the European Union.