The European Central Bank, the European Commission and ESMA have launched a joint industry drive to create common technical standards for tokenized securities — a major step toward bringing blockchain-based finance into the mainstream of Europe’s markets.
What’s happening
- The new European Tokenisation Standards Group (ETSG) will be set up to define common rules for holding, transferring and settling tokenized securities across blockchains and between DLT platforms and legacy market infrastructure.
- The ETSG is intended to make different blockchain-based systems interoperable, so banks, custodians and trading venues don’t need bespoke connections for every platform.
Who’s involved and how it will work
- The ECB, European Commission and the European Securities and Markets Authority (ESMA) are launching the initiative and will act as observers. Industry representatives will drive the technical and market discussions.
- Membership is open to European industry associations, private firms, international financial institutions, fintechs and technical service providers active in tokenization.
- Applicants must show relevant experience with market standards, have a European presence, and be able to commit time and organizational resources to the group’s work.
- The three authorities will jointly assess nominations for balance across geography and sector. Selected industry members will choose a chair and co‑chair; one of the authorities will provide a secretary.
- Interested organizations must submit nominations by Nov. 27, 2026. All applicants will receive feedback.
Timeline and deliverables
- Work is due to start in January 2027, with the ETSG targeting its first standards for early 2028.
- The mandate covers standards for the holding and settlement of financial instruments across DLT platforms and between blockchain networks and existing financial infrastructure. The group will review existing European and international standards, map current market practices, and identify where new technical requirements are needed.
- ETSG will also design a monitoring framework to check whether participants implement the agreed standards and may recommend measures for European authorities to encourage adoption. The group’s standards are not automatically binding on all firms.
- The ETSG will report regularly to the authorities and publish at least an annual public summary of its activities. Its mandate will end once the authorities agree its tasks are complete.
Why this matters
- European banks and market infrastructures are increasingly issuing, trading and settling traditional instruments using distributed ledger technology. Without common standards, firms running on different networks can face costly and fragile integration work.
- The ETSG’s standards are meant to support the Eurosystem’s wider Appia initiative to build an integrated framework for tokenized markets across Europe. Appia, launched in March 2026, explores financial infrastructure that would let traditional institutions issue and settle tokenized assets using central bank money.
- The ECB has already added practical plumbing: its Pontes service, which went live in September, connects blockchain-based platforms to the Eurosystem’s TARGET services and allows settlement of tokenized assets in central bank euros. Early participants included Deutsche Bank, Santander and Clearstream.
- The ECB has also indicated plans to invest part of its €23 billion own funds portfolio in highly rated digital securities, underlining institutional backing for tokenized assets.
Regulatory context
- The ETSG ties into the European Commission’s December 2025 Market Integration and Supervision Package, which proposes changes to improve cooperation between market infrastructures and amendments to the EU’s DLT Pilot Regime. Those amendments would push certain settlement participants to work toward interoperability and to develop supporting technical standards.
- The ETSG will begin work before any such legislative changes become law but can coordinate future work required if the proposals are adopted.
Market activity so far
- European firms are already testing tokenized markets: Securitize received EU approval in November 2025 to run a tokenized trading and settlement system on Avalanche. Financial institutions have also been trialing tokenized collateral and transactions involving government securities within existing custody and clearing setups.
Bottom line
The ETSG is a concerted move by European regulators to put industry-led, harmonized technical rules in place for tokenized securities — a foundational step toward interoperable, large-scale tokenized markets in Europe. Industry participants who meet the criteria should consider applying by Nov. 27, 2026.
What’s happening
- The new European Tokenisation Standards Group (ETSG) will be set up to define common rules for holding, transferring and settling tokenized securities across blockchains and between DLT platforms and legacy market infrastructure.
- The ETSG is intended to make different blockchain-based systems interoperable, so banks, custodians and trading venues don’t need bespoke connections for every platform.
Who’s involved and how it will work
- The ECB, European Commission and the European Securities and Markets Authority (ESMA) are launching the initiative and will act as observers. Industry representatives will drive the technical and market discussions.
- Membership is open to European industry associations, private firms, international financial institutions, fintechs and technical service providers active in tokenization.
- Applicants must show relevant experience with market standards, have a European presence, and be able to commit time and organizational resources to the group’s work.
- The three authorities will jointly assess nominations for balance across geography and sector. Selected industry members will choose a chair and co‑chair; one of the authorities will provide a secretary.
- Interested organizations must submit nominations by Nov. 27, 2026. All applicants will receive feedback.
Timeline and deliverables
- Work is due to start in January 2027, with the ETSG targeting its first standards for early 2028.
- The mandate covers standards for the holding and settlement of financial instruments across DLT platforms and between blockchain networks and existing financial infrastructure. The group will review existing European and international standards, map current market practices, and identify where new technical requirements are needed.
- ETSG will also design a monitoring framework to check whether participants implement the agreed standards and may recommend measures for European authorities to encourage adoption. The group’s standards are not automatically binding on all firms.
- The ETSG will report regularly to the authorities and publish at least an annual public summary of its activities. Its mandate will end once the authorities agree its tasks are complete.
Why this matters
- European banks and market infrastructures are increasingly issuing, trading and settling traditional instruments using distributed ledger technology. Without common standards, firms running on different networks can face costly and fragile integration work.
- The ETSG’s standards are meant to support the Eurosystem’s wider Appia initiative to build an integrated framework for tokenized markets across Europe. Appia, launched in March 2026, explores financial infrastructure that would let traditional institutions issue and settle tokenized assets using central bank money.
- The ECB has already added practical plumbing: its Pontes service, which went live in September, connects blockchain-based platforms to the Eurosystem’s TARGET services and allows settlement of tokenized assets in central bank euros. Early participants included Deutsche Bank, Santander and Clearstream.
- The ECB has also indicated plans to invest part of its €23 billion own funds portfolio in highly rated digital securities, underlining institutional backing for tokenized assets.
Regulatory context
- The ETSG ties into the European Commission’s December 2025 Market Integration and Supervision Package, which proposes changes to improve cooperation between market infrastructures and amendments to the EU’s DLT Pilot Regime. Those amendments would push certain settlement participants to work toward interoperability and to develop supporting technical standards.
- The ETSG will begin work before any such legislative changes become law but can coordinate future work required if the proposals are adopted.
Market activity so far
- European firms are already testing tokenized markets: Securitize received EU approval in November 2025 to run a tokenized trading and settlement system on Avalanche. Financial institutions have also been trialing tokenized collateral and transactions involving government securities within existing custody and clearing setups.
Bottom line
The ETSG is a concerted move by European regulators to put industry-led, harmonized technical rules in place for tokenized securities — a foundational step toward interoperable, large-scale tokenized markets in Europe. Industry participants who meet the criteria should consider applying by Nov. 27, 2026.