EU to Tighten Oversight of AI and Tokenization From 2027

Europe is changing ground. From 2027, ESMA will make AI and tokenization a supervision priority. There is no question, at this stage, of banning these technologies. Regulators mainly want to know where they are used, with what data, and what effects for clients. After MiCA, Brussels is therefore moving to another step: to look at what actually happens in financial companies.

After MiCA, Europe turns its attention to how financial firms use new technologies

MiCA set the rules of the game for crypto-assets. The next step is more concrete. ESMA wants to understand how digital technologies are used in financial activities that affect clients.

The new priority is called “Innovation with Investor Safeguards.” It will start in 2027. Authorities will first map current and planned uses, then select certain companies to perform initial checks. The goal is to see if control mechanisms really follow the sector’s transformations.

ESMA summarizes its goal as: “to exploit rapid technological developments while ensuring investor protection.”

The change is significant. A technology can be authorized on paper and cause, once deployed, issues with transparency, data quality, or client protection. This is precisely the terrain that European supervisors now want to explore.

AI and tokenization: what will regulators actually be looking at?

Checks will focus on governance, data, testing, and results. Supervisors also want to detect biases and situations where a client does not really understand the product offered.

Another angle: dependence on technology providers. A bank that relies heavily on a few providers does not eliminate its operational risk. It shifts it.

Tokenization raises other questions: asset representation, recording, transaction settlement, and interoperability between infrastructures. On this front, the ECB is also moving forward. It has just launched Pontes, an infrastructure allowing settlement of bulk transactions on tokenized assets in central bank money. It is also preparing limited investments in tokenized securities.

Christine Lagarde describes Pontes as a means to build a European financial market “more integrated, innovative, and resilient in the digital era.” Supervisors are thus learning to control these usages while Europe builds the corresponding infrastructures.

Trump wants to move fast and keep regulation out of the way

In Washington, the stated priority is different. Donald Trump rejects the idea of new AI regulations and presents the tech race as a power issue against China. On September 22, he also announced that U.S. official documents would now use the term “super intelligence” instead of “artificial intelligence.”

Trump asserts that the U.S. must not slow its industry at the risk of letting Beijing take the lead. He also said the Department of Justice might intervene if necessary.

The topic comes directly to the table with Xi Jinping. On September 24, Trump indicated that AI would be a “major discussion topic” with the Chinese president. Both countries are also seeking to maintain a dialogue channel on risks.

Brussels and Washington therefore do not speak exactly the same language. Europe strengthens supervision; the U.S. stresses speed and competition more. Companies could thus evolve in very different frameworks.

Meanwhile, China is also ramping up its AI push

Beijing is not waiting for the regulatory debate to be over. Chinese companies continue developing their own models, and the country seeks to integrate these technologies into more sectors. For Washington, this progress strengthens the argument against too heavy regulation.

The United States and China discuss technological security directly now. Exchanges particularly concern incidents and ways to limit certain risks. This obviously does not erase the rivalry between the two countries.

For Europe, the problem is different: it has neither American industrial power nor China’s weight. Its lever remains the one it masters best: internal market rules and financial actor supervision.

ESMA thus wants to avoid discovering problems after the fact, without closing the door to usages that could make markets faster or more accessible. It’s a balancing act. And it starts in 2027.

To remember

• 2027 marks the start of ESMA’s new supervision priority.
• Regulators will map the uses of artificial intelligence and tokenization.
• Pontes settles tokenized assets in European central bank money.
• Washington and Beijing maintain a dialogue on technological risks.
• The ECB remains very strict on stablecoin yields.

This new supervision is just part of the European shift. On stablecoins, the ECB also defends a strict line: these assets must not become yield-bearing products like deposits. A development that may displease part of the crypto ecosystem. For Brussels, the message is clear: innovation yes, but with limits around money, investors, and infrastructures.