EU Faces Competitive Threat from U.S. in Tokenization Regulations
- Eight EU-regulated digital asset firms are urging policymakers to expedite changes to the DLT Pilot Regime.
- The U.S. Securities and Exchange Commission (SEC) has issued a no-action letter allowing tokenized settlements, potentially enabling T+0 (instant settlement) markets by 2026.
- Proposed changes include raising the transaction volume cap from €6-9 billion to €100-150 billion and removing asset tokenization restrictions.
- The EU’s Market Integration and Supervision Package (MISP) is set to take full effect by 2030, risking a four-year delay compared to U.S. advancements.
- Tokenized assets are projected to grow into a multi-trillion dollar market over the next few years, enhancing settlement speeds and transparency.
The call for regulatory reform highlights concerns that Europe may lose its early lead in tokenization as the U.S. moves rapidly forward with blockchain integration in capital markets.
If Europe does not act swiftly, it risks falling behind, with significant implications for its financial competitiveness as global liquidity shifts towards U.S. markets.(Source)
