ESMA Lists Digital Innovation as New Regulatory Priority Starting 2027, Focusing on AI and Tokenization

Techub News reports that the European Securities and Markets Authority (ESMA) has announced the launch of a new European Union Strategic Supervisory Priority (USSP) from 2027, with a focus on digital innovation. This priority aims to ensure that regulators possess the expertise and capabilities to oversee new technologies, initially concentrating on the use of artificial intelligence and tokenization by regulated entities. The Digital Innovation USSP will run in parallel with the Cyber and Operational Resilience USSP, which has been in effect since 2025. ESMA stated that it will collaborate with national authorities and maintain flexibility to respond to future technological developments, including challenges posed by advanced models such as frontier AI. ESMA is the EU's financial markets regulatory body, and USSP is its convergence tool used to address strategically important high-risk areas across the EU, aiming to direct regulatory resources toward risks most critical to investor protection, financial stability, and the orderly functioning of EU financial markets.