ESMA is putting artificial intelligence and tokenized assets under closer watch across Europe, starting next year. The European Securities and Markets Authority has named AI and tokenization as its initial focus for a new supervisory priority on digital innovation, with national regulators set to map how firms use these tools and test a subset of companies against them.
The move, announced today, marks the latest expansion of ESMA’s Union Strategic Supervisory Priorities (USSPs). Every three years, ESMA picks up to two priorities that apply across the EU and reflect emerging developments and trends. The new AI and tokenization priority runs alongside an existing USSP on cyber and operational resilience, which ESMA launched in 2025.
National regulators will map client-facing uses of AI and tokenization, check a subset of firms and develop common approaches to oversight. ESMA is also closing a separate priority on environmental, social and governance disclosures this year.
The New Priority’s Scope
The AI and tokenization priority covers two distinct areas of digital finance. National regulators will document where tokenization is emerging and how firms use or plan to use AI and tokenization in products and processes that directly affect investors.
ESMA identified several risks to watch in both fields. Biased or misleading AI outputs could mislead investors. Products that investors may struggle to understand pose transparency problems. Reliance on a limited number of third-party providers concentrates risk in ways that could destabilize markets.
Supervisors will examine what firms tell investors about emerging technologies. They will share examples of innovations that have improved investor outcomes, reduce bias and ensure reliable results.
| Priority | Focus Area | Launch Date |
|---|---|---|
| USSP on AI and tokenization | Client-facing uses of AI and tokenization | 2027 |
| USSP on cyber and operational resilience | Cybersecurity and operational risk management | 2025 |
| Closed USSP on ESG disclosures | Environmental, social and governance reporting | This year |
How National Regulators Will Act
Under the new priority, national regulators will map client-facing uses of AI and tokenization. That means they will document how firms present these technologies to customers and how they are used in practice.
They will also check a subset of firms against those uses. The exercise is designed to identify patterns and gaps across the EU.
Developing common approaches to oversight is the third pillar of the work. National regulators are expected to coordinate their methods so that similar practices are treated consistently across borders.
The Risks ESMA Identified
ESMA flagged three main risks in its announcement:
- Biased or misleading AI outputs that could mislead investors.
- Products investors may struggle to understand.
- Reliance on a limited number of third-party providers, which concentrates risk in ways that could destabilize markets.
Each risk cuts at a different part of how digital finance operates.
The Timing of the Work
The new priority starts in 2027. That gives national regulators time to prepare their mapping exercises and testing protocols. The USSP framework allows ESMA to pick up to two priorities every three years.
Why This Matters for Investors
The move reflects a broader shift in how regulators treat technology. Digital tools are no longer optional extras for firms; they are core infrastructure that touches nearly every transaction.
The priority applies to client-facing uses, meaning the focus is on how these tools are presented to customers. That is a practical difference from purely technical oversight, which tends to miss how actual people experience a product.
Supervisors will examine what firms tell investors about emerging technologies. They will share examples of innovations that have improved investor outcomes, reduce bias and ensure reliable results.
Where the paper stands
The paper backs narrow disclosure requirements for AI and tokenization failures and is against any regime that treats those technologies as a moat to lock out smaller firms. The new ESMA priority, announced Wednesday, puts national regulators to work on digital finance oversight, but the question is whether that work will protect consumers or merely raise the regulatory cost of doing business for startups.
The USSP framework allows ESMA to pick up to two priorities every three years, and the new AI and tokenization priority runs alongside an existing USSP on cyber and operational resilience launched in 2025. The timing matters: national regulators get a year to prepare mapping exercises and testing protocols before the priority takes effect in 2027. That preparation window is a relief for firms that need to adapt, but it is also a chance for regulators to build expectations that favor the largest players first.
The risks ESMA flagged—biased or misleading AI outputs, products investors may struggle to understand, and reliance on a limited number of third-party providers—are real. But the paper’s concern is the shape of the response: a regime that treats AI and tokenization as a moat to lock out smaller firms. The paper opposes broad new rulebooks, agencies widening their own reach, and rules the biggest firms helped write.
Key Facts From the Announcement
- ESMA announced the priority Wednesday
- The new focus is AI and tokenization
- The USSP on cyber and operational resilience launched in 2025
- ESMA is closing the ESG disclosures priority this year
- The USSP framework allows up to two priorities every three years
The announcement sets the stage for a coordinated approach to digital finance oversight across the EU. National regulators will spend the coming year building expertise, documenting firm practices and developing common approaches to the risks ESMA has flagged.
Source material: “ESMA to prioritize EU-wide AI and tokenization supervision in 2027,” Cointelegraph.
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