ESMA to prioritize EU-wide AI and tokenization supervision in 2027

ESMA announced that artificial intelligence and tokenization will form the initial focus of a new EU-wide supervisory priority on digital innovation, beginning in 2027. The authority said the initiative is designed to help national supervisors accumulate expertise and align their approaches as financial firms increasingly integrate AI and tokenized products into investor-facing services. Under the USSP, supervisors across member states will identify where tokenization is emerging and document how firms currently use or plan to use AI and tokenization in products and processes that directly affect investors. ESMA expects national regulators to carry out initial checks on a subset of the firms judged to be most affected by these technologies. ESMA’s factsheet points to several specific risks for supervisors to watch, including biased or misleading outputs from AI systems, investor confusion caused by complex tokenized products, and concentration risk from reliance on a limited number of third-party providers. Supervisors will also review what firms disclose to investors about their use of emerging technologies and compile examples of innovations that improve investor outcomes, reduce bias and produce reliable results. The digital-innovation priority will run alongside an existing USSP on cyber and operational resilience that ESMA launched in 2025. Separately, ESMA said it is closing its prior USSP on environmental, social and governance disclosures this year. As part of its three-year cycle, ESMA identifies up to two priorities that reflect emerging developments and trends requiring coordinated attention across the EU.