EU Regulator Urges Faster Adoption of Tokenization to Compete Globally

The European Securities and Markets Authority (ESMA) has identified tokenization as a pivotal force reshaping capital markets. Executive Director Natasha Cazenave emphasized the EU must accelerate its regulatory framework to match progress in the US and UK during her keynote at Dubrovnik's 'Capital Markets in the Digital Age' conference.

Tokenization's potential extends beyond technological novelty—it promises democratized market access and reduced issuance costs through efficient secondary trading. Real-world asset tokenization already demonstrates these benefits, though challenges like illiquidity and interoperability hurdles remain unresolved.

ESMA views the Markets in Crypto-Assets (MiCA) regulation as the EU's strategic lever to maintain relevance in this transformative phase. The authority warns that sluggish adoption risks ceding market leadership in what it characterizes as a paradigm shift, not merely an incremental upgrade.