EU Regulators Form Tokenized Securities Standards Group

The first deliverables of Europe’s new tokenized-securities standards group are expected in early 2028, after the European Central Bank (ECB), European Commission and European Securities and Markets Authority (ESMA) launched the European Tokenisation Standards Group (ETSG).

The ETSG will begin work in January 2027. Selected industry representatives will lead discussions, while the three authorities will serve as observers. Eligible organizations can submit nominations until Nov. 27, 2026, according to application guidelines cited in the European Commission’s Nov. 9 announcement, but the resulting standards will not automatically bind financial institutions.

What operational problem is ETSG meant to solve?

ETSG’s published mandate covers the holding and settlement of financial instruments across distributed ledger technology platforms, between separate blockchain networks, and between those networks and existing financial infrastructure. That scope targets three recurring differences between connected systems:

• How financial institutions record ownership;
• How counterparties exchange transaction information; and
• How they complete securities transfers.

Without common rules, a firm operating on one network may need separate arrangements to transfer and settle assets with a firm on another. European institutions already use distributed ledger technology to issue, trade and settle traditional financial instruments, making interoperability an infrastructure problem rather than a question of creating a new instrument.

The group will examine existing European and international standards before identifying new technical requirements. Its work will cover market practices and technical arrangements already used by financial institutions. The announcement specifies no token standard, network architecture or mandatory implementation schedule, leaving the practical scope of the early-2028 package unsettled. The takeaway is clear: ETSG aims to remove bespoke connections between networks, but its technical design remains unfinished.

Who can shape the standards?

Membership is open to:

• European industry associations and private companies;
• International financial institutions;
• Fintech businesses; and
• Technical service providers involved in tokenization.

Applicants must demonstrate relevant experience in developing or applying financial-market standards and show that their organizations maintain a European presence. They must also have enough time and resources to attend meetings and contribute to the work, alongside a willingness to commit their organizations to actions arising from the group’s findings.

The ECB, Commission and ESMA will assess applications jointly, considering professional qualifications and balanced representation across geographic regions and industry sectors. Selected members will appoint a chair and co-chair, while a representative from one authority will serve as secretary. Both successful and unsuccessful applicants will receive feedback. The first rulebook will therefore be industry-led, with regulators centered on membership selection, observation and later reviews.

How does ETSG fit the ECB’s infrastructure?

The planned standards form part of Appia, an Eurosystem initiative launched in March 2026 to build an integrated framework for tokenized financial markets across Europe. Appia envisages infrastructure that allows conventional institutions to issue and settle tokenized assets while using central bank money. ETSG standards would support its work on asset interoperability, including securities movements between financial-market infrastructures.

The ECB has already introduced blockchain settlement through Pontes, which began operating in September. The service connects blockchain-based financial platforms with the Eurosystem’s existing TARGET services, allowing participating institutions to settle tokenized-asset transactions in central bank euros. Deutsche Bank, Santander and Clearstream were connected during the initial rollout.

The ECB has separately outlined plans to invest part of its €23 billion own funds portfolio in highly rated digital securities. The announcement does not specify how much of that portfolio will receive the allocation, so the figure remains a total rather than a committed tokenization investment. The standards connect to live central-bank settlement infrastructure, not a standalone crypto market.

Will the standards have binding force?

No automatic legal force applies. ETSG will develop a framework for monitoring whether participating organizations implement the agreed standards. It may recommend measures that European authorities could introduce to encourage adoption, but those recommendations remain subject to separate policy decisions. The route from voluntary guidance to enforceable obligations remains undefined.

The initiative also follows the Commission’s December 2025 Market Integration and Supervision Package, which proposed greater cooperation among financial-market infrastructures. Its proposed amendments to the EU’s Distributed Ledger Technology Pilot Regime would require certain institutions involved in securities settlement to pursue interoperability and supporting technical standards. The existing regime permits authorized market operators to test blockchain-based trading and settlement services under specific regulatory conditions.

Those amendments remain proposals. ETSG can begin developing standards before European lawmakers adopt the changes, and its mandate permits the group to coordinate later implementation work if the proposals become law. European firms already operate under the current framework: in November 2025, Securitize received EU regulatory approval for a tokenized trading and settlement system using Avalanche.

More recently, institutions have tested tokenized collateral within established custody and clearing arrangements, including transactions involving government securities and traditional financing markets. The announcement documents that adoption activity without quantifying its scale. The first standards may therefore codify operating practices already developing inside regulated financial infrastructure.

What changes next?

ETSG must report regularly to the three authorities and publish a public summary of its activities at least once a year. The ECB, Commission and ESMA will jointly review the group’s progress, and the mandate will end when all three agree that its assigned tasks are complete.

The next hard deadline is Nov. 27, 2026, leaving roughly two months before the January 2027 kickoff; the first standards would follow about a year later. Any move from voluntary guidance to enforceable obligations still requires a separate policy or legislative decision, which the announcement does not schedule.