EU Sets AI, Tokenization as Key Supervisory Priorities for Next Year

The European Union has designated artificial intelligence and tokenization as key supervisory priorities for next year.

Cointelegraph reported on September 23 that the European Securities and Markets Authority, the EU's securities regulator, had designated digital innovation as an EU Strategic Supervisory Priority, or USSP. ESMA selected AI and tokenization as the initial focus of supervision.

Financial authorities across EU member states plan to identify areas where tokenization is spreading in financial markets. They will also examine how financial firms are using AI and tokenization in products and business processes. Plans for future use of AI and tokenization will also be included in the review.

Authorities in EU member states will begin an initial assessment by selecting some financial firms that are being heavily affected by the technologies. ESMA plans to strengthen supervisors' expertise and establish a consistent supervisory approach across the EU as the use of AI and tokenization expands in financial services.

The USSP is a framework through which ESMA coordinates the work of national financial regulators to address risks that affect member states in common. ESMA selects as many as two strategic supervisory priorities to be applied across the EU every three years.