EU's financial regulator to make AI and tokenization a supervisory priority in 2027
European regulators will map how financial firms use the technologies in client-facing products and begin checks on the most affected businesses.
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.
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.