Tokenisation standards group seeks nominees by 27 November

Nominations for the European tokenisation standards group are due by 27 November, according to the ECB’s 9 November call. Hungarian banks and financial technology businesses may want to follow its work on making systems interoperable.

The initiative by the ECB, European Commission and ESMA targets wholesale financial market participants; the call and its mandate set the conditions for participation.

In our editorial assessment, the practical question is whether different providers’ systems can consistently handle information about a digitally recorded asset and the operations associated with it. A common technical language could reduce the difficulty of connecting different solutions, but the actual benefit depends on the subsequent standard’s content and use.

Establishing the group provides no basis for judging any investment product’s safety or expected return. Our article on the MNB’s market surveillance portal relates to checking the entity offering a product. The banking union proposal covers another area of cooperation among financial institutions.

The next substantive developments will be publication of the selected membership and concrete outputs. Before considering an application, an institution can compare its expertise, authority to represent its interests and available professional time with the mandate.

Ultimately, a standard’s value depends on whether participants understand data and responsibilities in the same way. When assessing a subsequent test, identifying the operation examined and the systems involved therefore also matters.