ESMA Adds AI and Tokenization to 2027 Regulatory Priorities

Odaily reports that the European Securities and Markets Authority has announced it will include AI and tokenization among the EU's 2027 regulatory priorities and has launched a project to "advance innovation with investor protection." National regulators will map out financial institutions' customer-facing AI and tokenization applications and conduct preliminary reviews of institutions with the largest related exposures.

Risks flagged by ESMA include biased, vague, or misleading AI outputs, investors' difficulty in understanding new products, skill gaps among regulators, and reliance on a small number of third-party technology vendors. The cybersecurity and operational resilience priorities launched in 2025 will be expanded in 2027 to smaller institutions and crypto asset service providers licensed under MiCA.