The European Securities and Markets Authority said in its Trends, Risks and Vulnerabilities report for the first half of 2026 that issuing different tokenized versions of the same stock may fragment liquidity. The report said tokenization can bring potential benefits including efficiency gains, broader investor access, greater programmability, and atomic settlement. ESMA also noted that prediction markets have not yet developed in a meaningful way in Europe. It added that major platforms in this segment have not obtained EU licenses, even though a license is required in most cases. The comments place both tokenized equities and prediction market activity within a regulatory and market-structure discussion, with ESMA highlighting both the possible benefits of tokenization and the risks tied to how these products are issued and supervised in the European market.
Odaily reported that the European Securities and Markets Authority (ESMA), in its Trends, Risks and Vulnerabilities Report for the first half of 2026, said that different tokenized versions of the same stock could lead to fragmented liquidity.
The report said tokenization has potential advantages, including higher efficiency, broader investor access, stronger programmability, and atomic settlement.
ESMA also said prediction markets have not yet seen meaningful development in Europe. Major platforms have not obtained EU licenses, while such activity requires licensing in most cases.
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