EU crypto companies warn: DLT pilot restrictions are too many, potentially accelerating global capital and innovation flow to the US

European time February 4, 2026, including Securitize, 21X, and Boerse Stuttgart Group, eight EU-regulated digital asset companies jointly sent a letter to EU policymakers, issuing an urgent warning. The letter pointed out that the current EU DLT pilot regime is overly restrictive and may push the liquidity, innovation, and market share of tokenized capital markets toward the United States.

Meanwhile, the crypto market is experiencing intense volatility. According to Gate market data, as of February 6, 2026, Bitcoin price has fallen to $64,891.7, a 24-hour decline of 8.83%; Ethereum price is $1,893.78, a 24-hour decline of 10.16%.

Regulatory Deadlock

When the market is highly volatile, policy-level battles are quietly shifting capital flows. This joint letter from eight top EU digital asset companies reveals a pressing reality.

The EU’s proud DLT pilot regime, due to its self-imposed limitations, may hand over the future. The joint letter details three core restrictions of the current regulatory framework, which have shifted from “safety barriers” to “development shackles.” The narrow scope of qualified assets excludes most financial instruments from testing; trivial trading volume caps (currently only 6-9 billion euros) make scale effects difficult; and a six-year license term adds uncertainty to long-term planning for companies.

Reform Calls

Faced with a missed strategic opportunity, these eight companies have proposed clear and specific revision suggestions. They request raising the trading volume cap to 100-150 billion euros, more than ten times the current limit. The urgency of this adjustment is underscored by the letter, which states that if the EU waits until 2030 to fully implement the relevant package, the US will have gained a full four-year head start.

Once this advantage is established, it could mean Europe’s capital markets will be long marginalized globally. The eight companies emphasize that their proposal is not about relaxing regulatory standards but about expanding the scope of qualified assets, increasing the cap, and removing the time limit through technical “fast-track” revisions.

Across the Atlantic

While EU companies struggle within the regulatory framework, the US market is advancing innovation at a very different pace. The SEC has permitted DTCC to conduct T+0 settlement, and the Chicago Mercantile Exchange, NYSE, and NASDAQ have all developed tokenization plans. These developments are not isolated. The rapid progress of on-chain market infrastructure in the US is creating a competitive advantage at the ecosystem level. From near real-time settlement to tokenized securities, the US’s pace of innovation has already surpassed the scope of EU pilot projects.

Deeper changes lie in the fact that this difference is not only reflected in specific rules but also in regulatory philosophy and market confidence. When US institutions can explore blockchain applications in capital markets more flexibly, European counterparts are still testing limited possibilities within pilot frameworks.

Restrictions vs. Industry Calls

The table below clearly shows the main restrictions of the EU’s current DLT pilot regime and the reform directions advocated by the industry:

Market Volatility

Behind the regulatory battles is the reality of highly volatile crypto markets. According to the latest Gate market data, Bitcoin’s market cap has fallen back to $1.56 trillion, with a market share of 56.80%.

Market analysis indicates that Bitcoin’s sharp correction is due to multiple complex reasons. Liu Jin, professor at Cheung Kong Graduate School of Business, believes Bitcoin is highly correlated with the Nasdaq index and should be viewed as a tech-asset. This view aligns with observations by Marion Laboure, an analyst at Deutsche Bank, who noted that Bitcoin’s movements largely fluctuate in tandem with stocks and other risk assets.

It is noteworthy that Bitcoin has declined for over three consecutive months, currently down more than 45% from its peak in October 2025. This sustained sell-off indicates waning interest from traditional investors and rising pessimism toward crypto assets.

Competitive Landscape

The transatlantic regulatory race is redefining the future landscape of global capital markets. Industry experts predict 2026 will be a transformative year for market innovation.

Kevin Kennedy, EVP of North American Markets at NASDAQ, predicts: “On the technological frontier, I expect significant progress in tokenization and digital assets, including tokenized securities and new products that drive meaningful growth in asset management.” This trend is driving fundamental changes in market infrastructure. Darko Hajdukovic, head of Digital Market Infrastructure at LSEG, states: “Major shifts in capital markets will occur in 2026, with distributed ledger technology increasingly adopted, bringing blockchain-driven innovation and efficiency to real-world assets.”

The core of competition is no longer just technological advantage but how regulatory frameworks balance innovation incentives and risk control. As tokenized assets gradually become mainstream, jurisdictions that offer clear, flexible, and forward-looking regulatory environments will attract global capital and talent.

Future Challenges

As market volatility and regulatory evolution intertwine, the EU faces a critical decision point. The joint warning from these eight companies is not only feedback on specific policies but also a concern about the EU’s strategic positioning in the global digital economy.

In the long term, the real challenge lies in building a regulatory framework that promotes innovation while maintaining financial stability. Melissa Stevenson, head of FX product management at ION, states: “Increased clarity in stablecoin regulation in the US and Europe will boost confidence and acceptance of commercial applications.” This regulatory clarity is crucial for mainstream financial institutions to participate in crypto markets. When Morgan Stanley plans to launch crypto trading for electronic trading clients, and nine major European banks plan to launch euro-pegged stablecoins in the second half of 2026, the regulatory framework must be capable of supporting these innovations.

According to Gate market data, Bitcoin’s 24-hour trading volume reached $2.08 billion, and Ethereum’s 24-hour trading volume was $914.72 million. Market activity remains active. When EU policymakers review this joint letter, they see not only a list of policy suggestions but also a map of global digital finance competition—a red line crossing the Atlantic, pointing to the future flow of capital, talent, and innovation. The volatility in the crypto world may temporarily attract attention, but the long-term pattern will be determined by the regulatory texts written in Brussels, Washington, and financial centers worldwide.