ESMA to prioritize AI and tokenization oversight in 2027

The European Securities and Markets Authority (ESMA) has announced that artificial intelligence and tokenization will be the primary focus of its EU-wide supervisory priorities starting in 2027. This initiative aims to coordinate national regulators to monitor how financial firms deploy these technologies in client-facing products.

Under the new framework, national competent authorities will map the use of these technologies, inspect a subset of affected firms, and develop unified supervisory approaches. ESMA highlighted several risks, including liquidity fragmentation in tokenized assets, misleading AI-generated results, and the industry's heavy reliance on a small number of external technology providers.

The move comes as tokenized equities in the EU have seen significant growth, rising from approximately €0.3 billion to an estimated €1.9 billion over an 18-month period ending in the first half of 2026. This regulatory shift follows the ongoing focus on cybersecurity and operational resilience.