ESMA Director Cazenave Warns of Risks in Tokenized Assets Market

Europe's top markets regulator, Natasha Cazenave of the European Securities and Markets Authority (ESMA), has issued a stark warning about the risks associated with tokenized assets. The global tokenized assets market has surged to $600 billion, but Cazenave cautions that many offerings may not provide genuine equity rights.

"Tokenization could lead to a transformational change of our markets," Cazenave stated. "For regulators and policymakers, the priority must be to ensure that such innovation develops within a framework that safeguards investors' interests and preserves financial stability." The concern centers on synthetic products that mimic stocks without granting voting rights or dividends—a problem highlighted by Elon Musk's criticism of Robinhood's tokenized SpaceX and OpenAI offerings as "fake."

Europe is emerging as a leader in tokenization, with blockchain-based fixed-income issuance tripling last year to €3 billion. Germany, France, Spain, and the European Investment Bank are actively experimenting with digital bonds, while the U.S. accelerates its own initiatives.