EU taps industry to set standards for tokenized securities

The European Central Bank (ECB), European Commission and European Securities and Markets Authority are seeking nominations for an industry-led group that will draft common standards for holding and settling tokenized securities.

Eligible applicants include EU industry associations, global institutions, private firms and fintech companies. They can apply to the European Tokenisation Standards Group (ETSG) by Nov. 27, with work set to begin in January 2027, according to a release published Monday. The three EU institutions will participate as observers.

The group will develop technical and market standards to help companies hold and settle tokenized securities across different distributed ledger technology (DLT) platforms and ensure those platforms can work with existing financial systems. The group aims to produce an initial set of standards by early 2028, according to its mandate. The standards will support Appia, the Eurosystem’s initiative to develop a blueprint for Europe’s tokenized financial markets.

The institutions warned that fragmentation could limit the benefits of tokenization and said the group may recommend ways for EU authorities to encourage firms to adopt its standards.

In September, the Eurosystem launched Pontes, a system that allows financial institutions to settle wholesale transactions in tokenized assets in central bank money.