ECB, EU regulators seek common rules for tokenized securities

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The European Central Bank (ECB), European Commission and European Securities and Markets Authority (ESMA) have launched a joint initiative to develop common standards for tokenized securities, inviting financial institutions and blockchain companies to apply by Nov. 27.

Summary

The ECB, European Commission and ESMA launched an industry group to develop tokenized securities standards.
Financial institutions, fintech companies and blockchain providers can apply for membership until November 27, 2026.
The group will develop common rules for holding and settling tokenized securities across financial systems.
Industry representatives will lead the initiative, with initial standards expected to be ready by early 2028.

According to the European Commission’s Nov. 9 announcement, the new European Tokenisation Standards Group (ETSG) will bring together financial market participants to establish common rules for holding and settling securities across blockchain networks and traditional financial systems.

The group is expected to begin work in January 2027, with the first standards scheduled for early 2028. Industry representatives will lead the discussions, while the three European authorities will participate as observers.

The initiative comes as European financial institutions increasingly use distributed ledger technology (DLT) to issue, trade and settle traditional financial instruments.

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EU seeks common standards for tokenized securities

The new group will focus on making different blockchain-based financial systems compatible with one another, allowing financial institutions to transfer and settle tokenized securities without relying on separate arrangements for every platform.

Under its published mandate, the ETSG will develop standards covering the holding and settlement of financial instruments across DLT platforms and between blockchain networks and existing financial infrastructure.

The authorities want to address differences in how financial institutions record ownership, exchange transaction information and complete securities transfers. Without common standards, firms operating on separate networks may struggle to connect their systems.

The group will examine existing European and international standards before identifying areas where new technical requirements are needed. Its work will cover market practices and technical arrangements already used by financial institutions.

The ETSG will develop a framework to monitor whether participating organizations implement the agreed standards. It may recommend measures that European authorities could introduce to encourage adoption, although the announcement does not make the proposed standards automatically binding on every financial institution.

ECB invites banks, fintech firms and blockchain providers

Membership is open to European industry associations, private companies, international financial institutions, fintech businesses and technical service providers involved in tokenization.

According to the application guidelines, applicants must demonstrate relevant experience in developing or applying financial market standards and represent organizations with a European presence.

Candidates must have enough time and resources to participate in meetings and contribute to the group’s work. They must be able to commit their organizations to actions arising from its findings.

The ECB, Commission and ESMA will jointly assess applications, considering professional qualifications and the need for balanced representation across geographic regions and industry sectors.

Selected industry members will appoint a chair and co-chair, while a representative from one of the three European authorities will serve as secretary.

Interested organizations have until Nov. 27, 2026, to submit nominations. Both successful and unsuccessful applicants will receive feedback on their applications.

Tokenization standards will support ECB’s Appia project

The planned standards form part of the Eurosystem’s Appia initiative, which seeks to develop an integrated framework for tokenized financial markets across Europe.

Launched in March 2026, Appia covers financial infrastructure that could allow traditional institutions to issue and settle tokenized assets while using central bank money.

The ECB has already introduced blockchain settlement services through Pontes, which began operating in September, as crypto.news previously reported.

Pontes connects blockchain-based financial platforms with the Eurosystem’s existing TARGET services, allowing participating institutions to settle transactions involving tokenized assets in central bank euros.

Deutsche Bank, Santander and Clearstream were among the institutions connected to the service during its initial rollout. The ECB has separately outlined plans to invest part of its €23 billion own funds portfolio in highly rated digital securities.

The ETSG’s first standards are expected to support Appia’s work on asset interoperability, including the movement of securities between different financial market infrastructures.

The mandate requires the group to report regularly to European authorities and publish a public summary of its activities at least once a year.

EU tokenization plans connect with existing market rules

The initiative is linked to the European Commission’s December 2025 Market Integration and Supervision Package, which proposed changes to improve cooperation between financial market infrastructures.

Among its proposals are amendments to the EU’s DLT Pilot Regime, which allows authorized market operators to test blockchain-based trading and settlement services under specific regulatory conditions.

The proposed amendments would require certain institutions involved in securities settlement to work toward interoperability and develop supporting technical standards.

European firms have already begun operating under the existing framework. In November 2025, Securitize received EU regulatory approval to operate a tokenized trading and settlement system using Avalanche.

More recently, financial institutions have been testing tokenized collateral within existing custody and clearing arrangements, including transactions involving government securities and traditional financing markets.

The ETSG will begin developing standards before the proposed DLT Pilot Regime amendments become law. Its mandate allows the group to coordinate future work required under those amendments if European lawmakers adopt them.

The European Commission, ESMA and ECB will jointly review the group’s progress, while its mandate will end once the three authorities agree that its assigned tasks have been completed.

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