EU regulators: Tokenized assets will reshape the Capital Market and need to align with the US and UK.

[Coin World] The EU securities regulator stated that tokenization has great potential to change the market, and the EU must ensure its development keeps pace with the United States and the United Kingdom. During a keynote speech at the "Capital Market in the Digital Age" conference held in Dubrovnik, Croatia, the Executive Director of the European Securities and Markets Authority (, Natasha Cazenave, shared this view. The event aimed to highlight the integration of new technologies such as artificial intelligence and cloud computing in the capital market, while another emerging industry is rapidly becoming an important part of the global market.

According to Cazenave of ESMA, this key innovation is tokenization, which is an aspect of the market that can reshape access to and participation in the Capital Market. The real-world assets launched on-chain to date indicate that tokenization can not only expand access but also reduce issuance costs, as it enables faster and more efficient secondary trading. However, challenges remain, including insufficient liquidity and interoperability. Another is regulatory clarity.

"This is not just a technological revolution. It could lead to transformative changes in our markets. With the right legal framework, it can contribute to the goals of SIU by enhancing interoperability, transparency, and cross-border efficiency. It can also lower costs for businesses by directly embedding compliance and reporting obligations into digital assets, while providing regulators with real-time oversight tools."

The field of tokenized assets has seen a large number of initiatives aimed at bringing assets onto the blockchain. The ESMA believes that the EU can leverage the crypto asset market regulations to protect investors and stay in sync with other jurisdictions (including the US and the UK). Commenting on the trend of asset tokenization, the ESMA executive noted that with certain crypto platforms and some brokers leading in tokenized stocks, as well as certain asset management companies becoming major players, this emerging market (valued at around $600 billion) is expected to experience exponential growth.

The adoption rate by the government is also on the rise. Cazenave pointed out that the EU market accounts for more than 50% of the tokenized fixed income instruments launched on-chain in 2024. While the EU aims to expand the scale of tokenization, it is important for regulators and other participants to stay in sync with the UK and the US, which are formulating a roadmap recommended by the Presidential Working Group on Digital Assets. However, since tokenized assets rely on the same underlying technology, EU regulators have already "understood the risks and legal uncertainties." Policymakers can leverage this knowledge to stay in sync with other leading regulatory jurisdictions.

"Given the expected growth rate of the market, it is important to keep pace and quickly reach a consensus on the direction forward," she pointed out.