The European Securities and Markets Authority (ESMA) said it would make AI, tokenization and other emerging technologies relevant to finance a new supervisory priority from 2027.
“Firms are increasingly using AI and tokenized products in day-to-day financial services to gain market share,” the financial watchdog said in a report released Wednesday, explaining why it is focusing on these two areas initially. “Technological innovation brings benefits but also risks,” it added.
Under its new supervisory program, the ESMA and national regulators across the European Union will examine how regulated firms use artificial intelligence and tokenized products in their core activities, rather than only in back-office operations.
The initiative, called “Innovation with investor safeguards,” will focus on building regulators’ ability to supervise new technology and ensuring firms have proper governance, reliable data and client-aligned outcomes.
The European Central Bank (ECB) has also recently announced several moves in the tokenization and stablecoin sectors of cryptocurrency. Earlier this week, the ECB said it plans to invest a small portion of its reserves in tokenized securities, giving it direct exposure to blockchain-based financial markets. T
That announcement followed the debut of Pontes, the ECB’s new wholesale platform that connects digital ledger technology (DLT) market infrastructure to its traditional payment infrastructure, but is separate from the retail digital euro pilot planned for 2027.
The ECB and the bloc’s 27 member-country central banks also called this week for a wider ban on crypto platforms' ability to offer stablecoin yields, rewards or returns. They said fiat-pegged digital assets are money, not savings accounts.
The EU regulatory authorities will next year map where financial firms already use or plan to use AI and tokenization in products and processes that directly affect customers. They will also begin initial checks on a subset of the most affected firms and identify where tokenization is emerging in practice.
The EU is shifting from setting rules for crypto assets under Markets in Crypto-Assets (MiCA), which came into effect on July 1, to examining how tokenized finance and AI are being used across the broader securities industry.