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ESMA to make AI and tokenization a supervisory priority in 2027
ESMA says it will map how firms use AI and tokenization in investor-facing products, then run initial checks on a subset of the most affected firms.
The European Securities and Markets Authority plans to prioritize AI and tokenization supervision across the European Union starting in 2027, according to Cointelegraph.
ESMA will have EU national regulators identify where tokenization is developing, document how firms use or plan to use AI and tokenization in products and processes that affect investors, and conduct initial reviews on a subset of the most affected firms.
The regulator said the initiative is designed to help supervisors build expertise and develop common oversight approaches as financial services increasingly rely on AI and tokenized products.
ESMA outlined key risks it will watch, including biased or misleading AI outputs, products investors may struggle to understand, and reliance on a limited number of third-party providers, and it will also look at what firms tell investors about emerging technologies.