AI, Tokenization to Shape EU Financial Regulator’s 2027 Supervisory Agenda

European financial regulators are preparing to expand oversight of artificial intelligence and tokenization as both technologies become more deeply integrated into customer-facing financial services.

The European Securities and Markets Authority (ESMA) said AI, tokenization and other emerging technologies relevant to financial markets will be included among its supervisory priorities beginning in 2027.

The regulator said financial institutions are increasingly turning to AI and tokenized products in their regular operations as they seek to compete more effectively. ESMA noted that innovation can improve financial services but can also introduce new areas of risk.

Under the upcoming supervisory framework, ESMA and national regulators across the European Union will review how regulated firms incorporate AI and tokenized products into their core businesses. The assessment will extend to technology that directly affects customers rather than being confined to internal systems.

The initiative, titled “Innovation with investor safeguards,” will focus on improving regulators’ ability to oversee emerging technologies. Authorities will examine firms’ governance arrangements, data quality and whether technology-driven services produce outcomes consistent with customer interests.

ECB Expands Tokenization Efforts

The European Central Bank (ECB) has separately stepped up its work in tokenized financial markets and stablecoins.

Earlier this week, the ECB said it plans to invest a small portion of its reserves in tokenized securities, creating direct exposure to blockchain-based financial instruments.

The move followed the introduction of Pontes, a wholesale platform designed to connect distributed ledger technology (DLT) market infrastructure with the ECB’s existing payment infrastructure. Pontes is separate from the retail digital euro pilot planned for 2027.

The ECB and central banks representing all 27 EU member states also called for wider restrictions on crypto platforms that provide stablecoin yields, rewards or returns. They said fiat-pegged digital assets should be treated as money rather than as savings accounts.

Supervisors Expand Beyond MiCA

EU authorities will spend the next year identifying where financial institutions already use AI and tokenization and where they plan to apply the technologies to products and processes involving customers.

Regulators will also conduct initial examinations of a selection of firms most affected by the developments and identify areas where tokenization is already being implemented.

The approach broadens the EU’s regulatory focus beyond the Markets in Crypto-Assets (MiCA) framework, which took effect on July 1. Regulators are increasingly examining the role of AI and tokenization across the broader securities and financial-services markets, rather than limiting oversight to dedicated crypto-asset rules.