How Europe’s regulatory push could scale tokenised markets

Europe’s regulatory clarity is shifting tokenisation from concept to production: the single‑market framework and targeted pilot regimes give institutions concrete authorization paths, cross‑border predictability and disclosure guardrails they can build operations around. That regulatory-first move helped produce measurable early outcomes — on‑chain real‑world assets surged in the first half of 2025 and regulated European tokenised bond issuance reached material volumes in 2024 — providing the balance‑sheet signal banks and asset managers require to commit. MiCA’s staged rollout and licensing regime in particular create a pragmatic timetable for firms to plan compliance investments and domicile strategically within the EU to gain passporting benefits. Yet the legal solution is only the start. The industry still faces technical constraints that threaten to recreate the fragmentation regulators are trying to eliminate: sustained transaction throughput, predictable latency and finality, and transaction‑ordering primitives that discourage extractable‑value capture are all unresolved. Those gaps have already encouraged middleware and well‑capitalised players — custody providers, sequencers, stablecoin issuers and bridging services — to capture execution and distribution advantages, increasing concentration and lock‑in risks. Practical industry workstreams in Europe and beyond are therefore focusing on atomic on‑chain delivery‑versus‑payment, programmable transaction‑level compliance, modular architectures that unify custody, clearing and execution, and interoperable disclosure taxonomies to make tokens redeployable across venues. The contrast with the United States — where federal statutes remain unsettled and enforcement mosaics create planning uncertainty — is sharpening strategic tradeoffs: higher compliance costs in the EU in exchange for legal certainty versus scale and regulatory ambiguity in the US. Additional momentum is visible in other hubs (notably coalitions in Singapore) pushing proof points for continuous, auditable liquidity and market‑making on ledgered settlement rails. For Europe to convert its regulatory optionality into systemic market depth, standard‑setters, market operators and large balance‑sheet holders must coordinate on custody harmonisation, surveillance tooling and cross‑chain messaging to preserve tradability and price discovery. If that coordination happens, Europe could export governance and technical templates that reduce global frictions; if proprietary stacks dominate, issuance will remain tradable in limited pools and liquidity will fragment across rails.