The European Securities and Markets Authority (ESMA) is set to launch a new Union Strategic Supervisory Priority in 2027. The initiative focuses on the use of artificial intelligence and tokenized assets by financial firms within the European Union.
National regulators will be tasked with identifying firms that use these technologies in client-facing operations. Authorities will then select specific companies for deeper inspections to establish shared oversight frameworks across member states.
The move follows a significant increase in the market for tokenized equities, which grew from €0.3 billion to an estimated €1.9 billion in the 18 months leading up to the first half of 2026.
ESMA identified liquidity fragmentation as a primary concern, noting that disconnected trading pools can complicate price discovery. The regulator aims to standardize evaluation criteria for AI trading models and tokenized fund structures.
In addition to the new priority, ESMA plans to review the EU’s DLT Pilot Regime in mid-2027. This assessment will determine the future direction of the program, which currently allows firms to test distributed ledger technology in securities trading.
