The European Union has designated artificial intelligence and tokenization as key supervisory priorities for next year.

Cointelegraph reported on September 23 that the European Securities and Markets Authority said it had designated digital innovation as an EU Strategic Supervisory Priority, or USSP. ESMA set AI and tokenization as the initial focus areas for supervision.

Financial authorities in EU member states plan to identify where tokenization is spreading across financial markets. They will also examine how financial firms are using AI and tokenization in products and business processes. Future plans to adopt AI and tokenization will also be included in the review.

Authorities in EU member states will select some financial firms that are expected to be significantly affected by the technologies for an initial review. ESMA plans to strengthen supervisors' expertise and establish a consistent supervisory approach across the EU as the use of AI and tokenization expands in financial services.

The USSP is a framework through which ESMA coordinates the work of national financial regulators to address risks that affect member states in common. ESMA selects up to two strategic supervisory priorities to be applied across the EU every three years.