ESMA Warns Tokenized Stocks Risk Fragmenting Liquidity

ESMA's concern is structural rather than cyclical: tokenized equities can multiply representations of the same underlying, and without coordinated standards that proliferation works against the liquidity and settlement efficiency tokenization is meant to deliver. The prediction-market remark is the sharper signal — Europe's constraint is licensing, not demand, which keeps that activity offshore or informal. Whether issuers converge on shared standards or keep launching parallel tokens is the open question for how EU tokenized equity markets develop.