The European Central Bank supports the tokenization of EU capital markets, but with strict regulatory measures.

CoinFeed reported on April 14th, citing Cointelegraph, that the European Central Bank (ECB) stated in its latest macroprudential bulletin that tokenization technology can only improve the efficiency of EU capital markets if it is pegged to central bank currency, infrastructure remains interoperable, and regulation is "robust and supportive." The ECB noted that DLT (Decentralized Technology Lending) helps deepen the EU savings and investment union, but its benefits depend on interoperable infrastructure and policymakers' ability to manage new risks. The report emphasized that efficiency improvements require avoiding fragmentation of incompatible platforms and ensuring that tokenized market settlements can use central bank currency. While there is preliminary evidence that tokenized bonds reduce borrowing costs and narrow bid-ask spreads, these benefits remain exploratory and conditional, and technical, legal, and liquidity risks persist.