The European Securities and Markets Authority plans to make artificial intelligence and tokenization the first focus of a new European Union supervisory priority on digital innovation from 2027. The move will be carried out across the bloc through coordinated work with national regulators.

ESMA said supervisors will map where tokenization is emerging and record how firms already use, or intend to use, AI and tokenization in products and internal processes that directly affect investors. A first round of checks is also planned for a subset of firms seen as most exposed to those technologies.

A new coordinated EU priority

The initiative will be set up as a Union Strategic Supervisory Priority, or USSP, a framework ESMA uses to align national supervisory work on risks that need attention across the European Union. Under that process, the authority selects up to two priorities every three years based on developments and trends that matter across the bloc.

According to ESMA, the 2027 digital innovation priority is meant to help supervisors build practical knowledge and move toward common oversight approaches as financial firms expand their use of AI tools and tokenized products. The effort is aimed at creating a more consistent supervisory response before those technologies become more deeply embedded in investor-facing services.

What supervisors will examine

ESMA said national supervisors will begin by identifying where tokenization is appearing in the market. They will also document how firms use or plan to use AI and tokenization in products and processes that have a direct impact on investors.

The work is expected to go beyond simple mapping. Supervisors also plan to review what firms are telling investors about these emerging technologies and to compare examples of innovation that appear to improve investor outcomes, reduce bias and produce reliable results. A subset of the most affected firms will face initial supervisory checks as part of the rollout.

Risks highlighted in ESMA’s factsheet

In its factsheet, ESMA pointed to several issues that supervisors should monitor as AI and tokenization spread through financial services. Among them are AI outputs that may be biased or misleading, products that investors could find difficult to understand and operational dependence on a small number of third-party providers.

Those concerns suggest ESMA is looking not only at whether firms adopt new technology, but also at how those tools are explained, governed and delivered. The authority’s emphasis remains on investor-facing effects rather than on innovation in the abstract.

How the 2027 plan fits with existing oversight

The new digital innovation priority will run alongside ESMA’s existing USSP on cyber and operational resilience, which began in 2025. At the same time, the authority said it is bringing a separate supervisory priority on environmental, social and governance disclosures to a close this year.

That sequence shows how ESMA is rotating its coordinated EU-wide priorities as new themes emerge. The next confirmed step is the start of the 2027 program, when supervisors across the bloc are expected to begin the mapping exercise, gather information from firms and carry out the first targeted checks under the new framework.

Source: cointelegraph.com