Europe will lead tokenisation if 2026 turns pilots into infrastructure

By Edwin Mata, CEO & Co-Founder of Brickken

For many projects, 2026 is when pilots move into live production and market infrastructure starts to harden. Europe, often caricatured as overly cautious, is quickly becoming the place where regulation, institutional demand and enterprise-grade tooling actually line up. Financial institutions already see measurable operational gains. Settlement completes faster, reconciliation produces fewer errors, and collateral can be mobilised within minutes rather than days. Early pilots show that processes which once created end-of-day delays now close cleanly, with fewer operational breaks.

A regulatory stack built to scale

The EU’s Markets in Crypto-Assets Regulation (MiCA) creates uniform rules for crypto-asset service providers and issuers, including asset-referenced and e-money tokens. Tokenised securities remain subject to MiFID II, while the DLT Pilot offers targeted exemptions to test secondary market activities such as trading, settlement and custody under supervisory oversight. The Pilot permits operators to test DLT-based market infrastructure, including the use of permissioned or selected public networks where supervisors approve the risk controls. Interoperability with external systems is allowed only under strict supervisory conditions. Together, these frameworks provide clarity on disclosures, authorization and supervision, allowing firms to structure multi-country operations without regulatory uncertainty.

In June, ESMA proposed changes that would extend, and potentially convert, the DLT Pilot into a permanent regime, signalling a maturing toolkit. Together, MiCA and the DLT Pilot give Europe a shared framework that lets projects move from proof-of-concept to supervised operation and then scale across borders. Europe is a key jurisdiction where projects can transition from pilot to full-scale operation without encountering conflicting legal regimes.

Institutions are setting the primitives

The private sector is now shaping the operational foundations of tokenised markets. Banks, custodians and asset managers are defining how settlement should function on distributed systems, how identity and KYC controls apply on chain and which token formats satisfy operational, legal and audit requirements. Europe’s framework draws them into production-grade experiments and early commercial rollouts. J.P. Morgan recently tokenised a private-equity fund on its Kinexys Digital Assets platform, integrating fund-administrator workflows so registers and cash flows become programmable.

HSBC plans to offer tokenised deposits to corporate clients in the US and the UAE, targeting faster cross-border payments and treasury management, a profile built for institutional operations.

These initiatives matter because they embed institution-grade requirements directly into the asset. They determine who may hold it, how and when it settles, how disputes are handled and what must be disclosed. This is also influencing token format design, from identity-driven models such as ERC 3643 to minimal and interoperable approaches such as ERC 7943, each responding to different operational and compliance expectations. The formats that gain adoption will be those that best align with institutional settlement logic, permissioning rules and supervisory tests.

Teams running multi-jurisdiction programs report the biggest gains when compliance logic, corporate actions and audit trails live in-asset, so onboarding and post-trade checks align with supervisory tests by default.

The incentives that move decision-makers

Boards and operating committees generally prioritise time, risk, and reach. Tokenised rails positively impact all three levers by enabling T+0 settlement for selected workflows. This creates immediacy that reduces financing costs and drastically shortens time to cash. Live tests report shorter time-to-cash and fewer breaks on eligible flows.

Risk teams gain from having a single source of truth for positions and entitlements, cutting reconciliation work and post-trade exceptions. Transfer controls and role-based permissions embedded in the asset create audit trails that supervisors can test, narrowing legal uncertainty. And when rules are aligned, they allow cross-border issuance and distribution consistently, turning fragmented national pilots into regional markets. MiCA’s consistent treatment of service providers and stable-value instruments reduces the semantic disputes that stall enterprise adoption.

The strategic window: Europe’s advantage

Europe holds a lead, yet the window remains narrow. The US currently converges on a patchwork of federal and state rules, while Asia advances state-driven alternatives with central-bank-backed pilots. These competitors will scale quickly once policy greenlights are in place. Europe can set the architecture of future financial infrastructure only if 2026 turns from “pilot-rich” to “production-credible.”

Three near-term priorities must guide execution. The first is achieving alignment between supervisors and market participants on how both primary and secondary market processes operate on distributed systems. The DLT Pilot covers only a defined segment of the market, focused on secondary trading, settlement and custody. Its insights are valuable, but they represent only part of the market structure. Most financial instruments are created, distributed and managed entirely within primary markets, where issuance, investor onboarding, disclosures, corporate actions and entitlement updates define the lifecycle of the asset. Secondary markets cannot scale unless primary market workflows are digitised first. Demonstrating how these primary processes operate on distributed systems, alongside the secondary market evidence generated under the Pilot, will be essential. A consistent set of metrics across both domains, such as time to cash, exception rates and reconciliation quality, will help policymakers assess whether tokenised infrastructure is ready for wider adoption.

The second priority is interoperability. Institutions will require infrastructure where ledgers operate as interchangeable components rather than isolated environments. Cross-network messaging frameworks such as Chainlink CCIP, Wormhole and LayerZero are beginning to provide the settlement and communication layers needed for atomic or near-atomic execution where permitted. At the asset layer, token formats must remain portable across networks. Identity-driven models such as ERC 3643 and minimal, interoperability-oriented approaches such as ERC 7943 reflect different design philosophies that respond to distinct market needs. A competitive landscape of standards and interoperability frameworks is essential for innovation, but none should become mandatory through market inertia alone. Interoperability must preserve choice, ensure portability of controls and prevent the concentration of critical infrastructure in a single model or vendor.

Third, the industry must speak the language of operations. Decision-makers buy lower error rates, faster closes and better treasury yields; frame business cases around measurable improvements.

Europe’s advantage lies in regulatory pragmatism tied to live experimentation. If 2026 becomes the year the industry stops selling labels and delivers measurable operational wins under supervised rails, Europe will lead rather than follow. At that point, the term “tokenisation” can fade into the background, like any other piece of infrastructure.