ECB and ESMA Begin Recruitment of Experts for Tokenization Standards Development

The European Central Bank (ECB), the European Commission, and the European Securities and Markets Authority (ESMA) announced the formation of the European Tokenisation Standards Group (ETSG) on November 9, 2026. This industry group will focus on developing unified technical and market standards for the storage, accounting, and settlement of tokenized financial instruments. Its goal is to ensure interoperability between platforms based on distributed ledger technology (DLT) and their compatibility with the existing infrastructure of European financial markets.

Applications for participation will be accepted until November 27, after which European institutions will select candidates. ETSG is scheduled to begin work in January 2027, with the first versions of the standards expected by early 2028. This initiative will be part of a broader Eurosystem strategy to develop an integrated market for tokenized assets.

Who Can Participate in Developing the Standards

ETSG plans to involve representatives from financial organizations, international institutions, industry associations, fintech companies, and distributed ledger technology providers. Candidates should have experience in developing or applying technical and financial standards, represent organizations with a presence in Europe, and be able to actively participate in the group's activities.

ETSG will be led by industry representatives who will elect a chair and vice-chair. The ECB, the European Commission, and ESMA will have the status of permanent observers and will participate in discussions on the group's work results. This approach ensures that technical solutions are developed with market participants' needs in mind, while European institutions facilitate the group's alignment with regulatory agendas.

In selecting candidates, organizers intend to consider not only professional qualifications but also the balanced composition of the group. It should include various categories of financial market participants and technological approaches without the dominance of any single interest group.

Tasks Ahead for ETSG

The main focus will be on creating common standards for interaction between systems where tokenized financial instruments are issued, accounted for, and transferred. This includes enabling transaction settlements between different DLT platforms and ensuring the compatibility of these operations with traditional financial systems.

Tokenization allows financial instruments to be represented in digital form using distributed ledgers. However, different platforms may use their own technical protocols, data storage rules, and settlement mechanisms. Without unified approaches, such systems risk remaining isolated from each other, limiting the ability to transfer assets between platforms.

ETSG will need to study existing European and international standards, identify gaps in their application, and agree on new industry requirements. Additionally, the group should propose a mechanism for monitoring compliance with the developed standards and, if necessary, prepare recommendations for European authorities on encouraging their adoption.

The first versions of the standards are expected to be presented by early 2028. However, the group itself will not act as a financial regulator or independently establish mandatory legislative requirements for all market participants.