Europe's Tokenization Gamble: Why France FinTech Wants a Bigger DLT Sandbox

Alejandro Martínez · 2026-09-11

France FinTech isn't mincing words. Alongside a coalition of traditional finance players and tokenized asset firms, the group is pushing European co-legislators to think bigger on the DLT Pilot Regime (DLTPR). This comes as part of the broader Market Integration and Supervision Package (MISP). Their message? The current proposal doesn't go far enough. ### What's Actually on the Table Right now, the European Commission wants to raise the cap on financial instruments that can trade on DLT infrastructure from €6 billion to €100 billion. That's roughly $6.5 billion to $108 billion at current exchange rates. Sounds like a lot, right? But here's the thing: when you look at the sheer size of global capital markets and how fast tokenization is moving everywhere else, that ceiling starts to feel like a sandbox with walls that are way too low. The coalition's argument is simple. If Europe wants to compete, it can't keep its DLT infrastructure on a leash. The current cap, even at the proposed higher level, risks holding back the very innovation the pilot was designed to foster. ### The Three Big Asks So what exactly does France FinTech and its partners want? They've laid out three clear recommendations: - **Remove the global cap entirely** — or at the very least, set it high enough that European DLT infrastructures can actually reach meaningful market scale. - **Build in a flexible adjustment mechanism** — so the European Commission can tweak these thresholds as the market evolves, rather than waiting years for new legislation. - **Ensure a level playing field** — no differentiated thresholds that could favor one business model over another. Fair rules for all infrastructures. ### Why This Matters Beyond Brussels If you're in the payments or fintech space, you know that tokenization isn't a niche experiment anymore. It's becoming the backbone of how securities, funds, and even real-world assets get issued and traded. Europe has been trying to position itself as a leader here, but leadership requires room to run. The coalition's point is that a restrictive cap doesn't just limit growth — it sends a signal that Europe is hesitant. And in a global race where the U.S., Singapore, and the UAE are all moving fast on digital asset frameworks, hesitation can be costly. > "The goal is a European framework capable of sustainably supporting the development of tokenized financial markets and their global competitiveness." That's the bottom line from the group's open letter. It's not about deregulation for its own sake. It's about giving European DLT infrastructure the same fighting chance that other regions are giving theirs. ### What Happens Next The MISP package is still working its way through the legislative process. Co-legislators — that's the European Parliament and the Council — will have their say. France FinTech and its allies are hoping their recommendations land before the final text is locked in. For now, the conversation is shifting from "should we do this?" to "how ambitious are we willing to be?" And that's a question every fintech professional, whether in Paris or New York, should be watching closely. After all, the rules Europe writes today will shape how tokenized assets trade for years to come. A cap that's too low doesn't just limit Europe — it limits everyone who wants to do business there. And in a market that's moving this fast, nobody wants to be the one holding the sandbox shovel while everyone else builds skyscrapers.