The EU will strengthen its oversight of AI and tokenization starting in 2027

Europe is changing its approach. Starting in 2027, the ESMA will prioritize AI and tokenization in its supervision. At this stage, there is no question of banning these technologies. Regulators mainly want to know where they are used, with what data, and what effects they have on customers. After MiCA, Brussels is therefore moving to another phase: looking at what is actually happening in financial companies.

In brief

• The EU will strengthen its oversight of AI and tokenization starting in 2027. Europe is changing its approach. From 2027, the ESMA will prioritize AI and tokenization in its supervision. At this stage, there is no question of banning these technologies. Regulators mainly want to know where they are used, with what data, and what effects they have on customers. After MiCA, Brussels is moving to another phase: looking at what is actually happening in financial companies. After MiCA, Europe wants to see what is happening in companies. MiCA had set the rules of the game for crypto-assets. The next step is more concrete. The ESMA wants to understand how digital technologies are used in financial activities that affect customers. The new priority is called << Innovation with Investor Safeguards >>. It will begin in 2027. Authorities will first map current and planned uses, then select certain companies for initial checks. The goal is to see if control mechanisms actually keep pace with sector transformations. The ESMA summarizes its objective as: << harnessing rapid technological developments while ensuring investor protection >>. The change is significant. A technology may be allowed on paper but may pose transparency, data quality, or customer protection issues once deployed. This is precisely the area that European supervisors now want to explore. AI, tokenization: what regulators will actually look at. The controls will focus on governance, data, testing, and outcomes. Supervisors also want to identify biases and situations where a customer does not fully understand the product offered. Another angle: dependence on technology providers. A bank that relies heavily on a few vendors does not eliminate its operational risk; it merely shifts it. Tokenization raises other questions: asset representation, registration, transaction settlement, and compatibility between infrastructures. In this area, the ECB is also making progress. It has just launched Pontes, an infrastructure for settling large 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 more integrated, innovative, and resilient European financial market in the digital age. Supervisors are therefore learning to control these uses while Europe builds the corresponding infrastructures. Trump wants to move quickly and rejects a new layer of rules. In Washington, the stated priority is different. Donald Trump rejects the idea of new regulations on AI and presents the technological race as a power issue against China. On September 22, he also announced that official U.S. documents would now use the term << super intelligence >> instead of << artificial intelligence >>. Trump asserts that the United States must not slow down its industry at the risk of allowing Beijing to get ahead. He also stated that the Justice Department could intervene if necessary. The topic comes directly to the table with Xi Jinping. On September 24, Trump indicated that AI would be a << major topic of discussion >> with the Chinese president. Both countries are also seeking to maintain a dialogue channel on risks. Brussels and Washington do not speak exactly the same language. Europe is strengthening oversight; the United States emphasizes speed and competition more. Companies could therefore evolve in very different frameworks. Meanwhile, China is also accelerating on AI. Beijing is not waiting for the regulatory debate to be over. The authorities are already taking steps to advance their AI capabilities.

Chinese reprises continue to develop their own models, and the country seeks to integrate these technologies into more sectors. For Washington, this progress strengthens the argument against overly heavy regulation. The United States and China are now discussing technological security directly. The exchanges particularly focus on 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 lacks both the industrial power of the United States and the weight of China. Its leverage remains what it masters best: the rules of the internal market and the oversight of financial actors. The ESMA thus wants to avoid discovering problems after the fact, while not closing the door to uses that could make markets faster or more accessible. It is a balancing act. And it begins in 2027. Notably, 2027 marks the start of the new supervisory priority of the ESMA. Regulators will map the uses of AI and tokenization. Pontes regulates tokenized assets in European Central Bank currency. Washington and Beijing maintain a dialogue on technological risks. The ECB remains very strict on the remuneration of stablecoins. This new oversight is only part of the European shift. Regarding stablecoins, the ECB also defends a strict line: these assets should not become interest-bearing products like deposits. An evolution that may displease part of the crypto ecosystem. For Brussels, the message is clear: innovation yes, but with limits around money, investors, and infrastructures.

• 2027: ESMA will begin to concretely monitor the uses of AI and tokenization in European financial firms.
• Tokenization: the ECB is developing Pontes to enable the settlement of tokenized assets directly in European Central Bank currency.
• United States and China: Washington and Beijing are strengthening their exchanges on technological risks while continuing their competition in AI.

After MiCA, Europe Wants to Examine What Happens in Companies

MiCA had 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 customers.

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 for initial checks. The goal is to see if control mechanisms truly keep pace with sector transformations.

ESMA summarizes its goal as: << exploiting rapid technological developments while ensuring investor protection >>.

The change is significant. A technology may be authorized on paper but pose transparency, data quality, or customer protection issues once deployed. This is precisely the area that European supervisors now want to explore.

AI, Tokenization: What Regulators Will Actually Look At

The controls will focus on governance, data, testing, and outcomes. Supervisors also want to identify biases and situations where a customer does not fully understand the product offered.

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

Tokenization raises other questions: asset representation, registration, transaction settlement, and compatibility between infrastructures. In this area, the ECB is also making progress. It has just launched Pontes, an infrastructure allowing for the settlement of large transactions on tokenized assets in central bank money. It is also preparing for 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 age >>. Supervisors are therefore learning to control these uses while Europe builds the corresponding infrastructures.

Trump Wants to Move Fast and Rejects a New Layer of Rules

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

Trump asserts that the United States must not slow down its industry at the risk of allowing Beijing to get ahead. He also mentioned that the Department of Justice could intervene if necessary.

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

Brussels and Washington do not speak exactly the same language. Europe is strengthening supervision; the United States emphasizes speed and competition more. Companies could therefore evolve in very different frameworks.

And Meanwhile, China is Also Accelerating on AI

Beijing is not waiting for the regulatory debate to conclude. Chinese companies continue to develop their own models, and the country seeks to integrate these technologies into more sectors. For Washington, this progress reinforces the argument against overly heavy regulation.

The United States and China are now directly discussing technological security. The exchanges focus in particular on 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 lacks both the industrial power of the United States and the weight of China. Its lever remains the one it masters best: the rules of the internal market and the oversight of financial actors.

The ESMA aims to avoid discovering problems after the fact, while not closing the door to uses that could make markets faster or more accessible. It is a balancing act. And it begins in 2027.

Key Points

• 2027 marks the start of ESMA's new supervisory priority.
• Regulators will map the uses of artificial intelligence and tokenization.
• Pontes regulates tokenized assets in European Central Bank currency.
• Washington and Beijing maintain a dialogue on technological risks.
• The ECB remains very strict on the remuneration of stablecoins.

This new oversight is just part of the European shift. Regarding stablecoins, the ECB also defends a strict line: these assets should not become interest-bearing products like deposits. An evolution that may displease part of the crypto ecosystem. For Brussels, the message is clear: innovation yes, but with limits around money, investors, and infrastructures.