ECMI - European Capital Markets Institute

On December 5th, 2024, under the auspices of the #StepUpStartups project, we gathered at the European Investment Bank in Luxembourg to explore how pension funds and sovereign wealth funds can unlock new opportunities for venture capital (VC) in Europe. This high-level policy workshop brought together key policymakers, researchers, and industry leaders to address the challenges and opportunities in scaling Europe's VC ecosystem. 💡 Key Highlights: Participants heard from Dr. Andreas Kuebart of the Leibniz Institute for Society and Space, who provided valuable context on untapped opportunities for European Venture Capital. The #first roundtable discussion, moderated by Chiara Frencia, featured insights from Philippe Hoett, Senior Investment Officer from the Deep Tech and Digital Unit at the European Investment Bank (EIB), Caro Rossi, Head of Network and strategic initiatives at ESNA - Europe Startup Nations Alliance, Panagiotis Alex Sevdalis from #DG Research & Innovation, and Jonas Mercier, Startup Coordinator at Luxinnovation GIE. Later, Chiara Fratto from the European Investment Bank (EIB) shed light on the financial market constraints holding back innovative firms. This was followed by a #second roundtable discussion, moderated by Gabrielle Kolm from PensionsEurope, featuring insightful contributions from Remi Charrier, Head of Western Europe Institutional Mandate Relationships  at the European Investment Fund (EIF), Dr. Apostolos Thomadakis, Head of Research at the European Capital Markets Institute, Jochen Brodersen, researcher at #DG Research & Innovation, and Stéphane Pesch, CEO at Luxembourg Private Equity and Venture Capital Association. 💡 Why This #Matters: Europe's venture capital ecosystem holds immense potential, but barriers such as regulatory fragmentation and limited institutional investment persist. Engaging pension funds and sovereign wealth funds is a transformative step toward fostering innovation, supporting scale-ups, and bolstering the EU’s competitiveness on a global stage. A heartfelt thank you to all the speakers, institutions, and participants who contributed to this essential discussion. Stay tuned for more updates and insights from this event! Barrabés.biz EU-Startups DEEP Ecosystems ESNA - Europe Startup Nations #VentureCapital #Innovation #StepUpStartups #EuropeanEconomy

📢 SAVE THE DATE for our upcoming seminar on gold-plating in the context of EU #capitalmarkets! We will explore how gold-plating can distort market dynamics and discuss its impact on the competitiveness of both local economies and the EU as a whole. The seminar aims to shed light on the complexities of this practice and the steps needed to mitigate its negative effects. 🗓️ When: 15 January 2025, 11:30-13:00 CET 📍 Where: CEPS (Centre for European Policy Studies), Brussels 👉 MORE INFO & REGISTRATION: https://lnkd.in/djp8pekB CFA Institute

🌍 𝐇𝐨𝐰 𝐂𝐚𝐧 𝐏𝐞𝐧𝐬𝐢𝐨𝐧 𝐅𝐮𝐧𝐝𝐬 𝐚𝐧𝐝 𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐃𝐫𝐢𝐯𝐞 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧? Last Wednesday, I had the privilege of speaking at the OECD - OCDE Roundtable on the role of #insurance companies and #pension funds in today’s capital markets, organised by the 𝑰𝒏𝒔𝒖𝒓𝒂𝒏𝒄𝒆 𝒂𝒏𝒅 𝑷𝒓𝒊𝒗𝒂𝒕𝒆 𝑷𝒆𝒏𝒔𝒊𝒐𝒏𝒔 𝑪𝒐𝒎𝒎𝒊𝒕𝒕𝒆𝒆 (𝑰𝑷𝑷𝑪) and the 𝑾𝒐𝒓𝒌𝒊𝒏𝒈 𝑷𝒂𝒓𝒕𝒚 𝒐𝒏 𝑷𝒓𝒊𝒗𝒂𝒕𝒆 𝑷𝒆𝒏𝒔𝒊𝒐𝒏𝒔 (𝑾𝑷𝑷𝑷). The session focused on how these institutional investors can finance innovation and support economic growth. Here are the key takeaways from my presentation: 1️⃣ 𝐃𝐞𝐛𝐭-𝐄𝐪𝐮𝐢𝐭𝐲 𝐁𝐢𝐚𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐄𝐔 Europe’s financial system remains heavily debt-oriented, leaving venture capital (#VC) and private equity (#PE) underutilised. Pension funds and insurance companies contribute only a small share — 6% of VC and 10% of PE funds raised in the EU, highlighting untapped potential. 2️⃣ 𝐂𝐨𝐧𝐜𝐞𝐧𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭𝐬 Investments in VC and PE are concentrated in a few Member States. For instance, the top 5 account for 80% of VC funds raised by pension funds. Greater regional connectivity and partnerships are essential to balance this disparity. 3️⃣ 𝐄𝐧𝐜𝐨𝐮𝐫𝐚𝐠𝐢𝐧𝐠 𝐏𝐫𝐞-𝐈𝐏𝐎 𝐑𝐢𝐬𝐤 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐚𝐧𝐝 𝐈𝐏𝐎𝐬 Pre-IPO risk capital investments and IPO activity in Europe lag significantly behind global leaders like the US and Asia. This trend underscores the need to enhance market depth and liquidity, particularly for tech and high-growth firms. 💡 𝐖𝐡𝐚𝐭 𝐂𝐚𝐧 𝐁𝐞 𝐃𝐨𝐧𝐞? - 𝐋𝐞𝐯𝐞𝐫𝐚𝐠𝐞 𝐛𝐞𝐬𝐭 𝐩𝐫𝐚𝐜𝐭𝐢𝐜𝐞𝐬, such as Nordic pension funds and initiatives like the French Tibi, German Growth Fund, and WIN. - 𝐃𝐞𝐯𝐞𝐥𝐨𝐩 𝐥𝐨𝐧𝐠-𝐭𝐞𝐫𝐦 𝐬𝐚𝐯𝐢𝐧𝐠𝐬 𝐩𝐫𝐨𝐝𝐮𝐜𝐭𝐬 that align with EU policy goals but allow for national customisation. - 𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡𝐞𝐧 𝐭𝐡𝐞 𝐜𝐚𝐩𝐚𝐜𝐢𝐭𝐲 𝐨𝐟 𝐬𝐦𝐚𝐥𝐥𝐞𝐫 𝐩𝐞𝐧𝐬𝐢𝐨𝐧 𝐟𝐮𝐧𝐝𝐬 to assess and invest in alternative asset classes like VC and PE. - 𝐅𝐨𝐬𝐭𝐞𝐫 𝐬𝐞𝐜𝐨𝐧𝐝𝐚𝐫𝐲 𝐦𝐚𝐫𝐤𝐞𝐭𝐬 and encourage listings, particularly for SMEs and tech firms, to improve liquidity. - 𝐏𝐫𝐨𝐦𝐨𝐭𝐞 𝐫𝐞𝐠𝐢𝐨𝐧𝐚𝐥 𝐩𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬 𝐚𝐧𝐝 𝐜𝐨𝐧𝐧𝐞𝐜𝐭𝐢𝐯𝐢𝐭𝐲 to integrate Europe’s fragmented capital markets. The role of pension funds and insurance companies is critical in financing innovation, but we must address regulatory and supervisory challenges, as well as structural gaps to unlock their full potential. Thank you to the moderator Yoshihiro Kawai and fellow panelists Debora Revoltella, Anne Parthiot-Mons and Jo Holden for an insightful discussion. And to Timothy Bishop, Stéphanie Payet and Pablo Antolin Nicolas for the kind invitation and excellent organisation of the event. ECMI - European Capital Markets Institute CEPS (Centre for European Policy Studies)

🚨Don’t miss our article for Intereconomics with Dr. Apostolos Thomadakis, presenting the state of play of the 🇪🇺financial sector and assessing the European Commission’s plans on Financial Services. Link: https://lnkd.in/d27nXETK ➡️State of play of the financial sector: 1️⃣ The EU is characterised by a large banking system in terms of assets (250% of EU GDP vs 85% of US GDP), but it clearly lags in market capitalisation (P/B values of EU banks are well below 1). 2️⃣ The number of public listings in the EU has declined dramatically as a share of global IPOs. 3️⃣ The lack of development in the EU’s capital markets is stark. In 2008, the EU comprised 17% of global market capitalisation, compared with 35% for the US. By 2023, the US share had grown to 43%, while the EU's share had fallen to just 11%. The EU’s fixed income markets reflect a similar trend. 4️⃣Risk capital investments are low in the EU. 5️⃣The average size of an EU investment fund is less than one-sixth of its US counterpart. Additionally, European funds come with a higher price tag. 6️⃣ European funds display a significant and increasung tilt towards US assets. This challenging environment is compounded by a complex regulatory framework. ➡️Assessment of European Commission’s plans: 1️⃣ The mission letter to Commissioner Maria Luís Albuquerque overlooks a critical aspect: the need to support the competitiveness of European financial institutions. 2️⃣ Another significant issue with the mission letter is its propensity to foster political debates rather than resolve critical financial issues. 3️⃣ The mission letter also lacks detail on some crucial areas. For example, while it mandates the Commissioner to tackle capital market fragmentation by promoting simple and low-cost saving and investment products, it fails to acknowledge the limitations of previous attempts in this domain. 4️⃣ The reference to improving the EU supervisory system is vague. 5️⃣ The mission letter presents some measures as game-changers, such as the proposed reform of the EU securitisation framework. So what do we think should be done? 1️⃣The ESAs need resources to boost enforcement and shift back to principles-based legislation. 2️⃣ Strengthening the competitiveness of EU financial institutions requires globally aligned regulations that avoid burdening EU banks with requirements beyond international standards. 3️⃣ Implementing the proportionality principle more consistently for smaller banks can ensure stability without over-regulation. 4️⃣Strategies like expanding funded pension schemes and enabling cost-effective investment options would drive long-term growth. 5️⃣Addressing fragmentation in market infrastructure and enhancing ESMA’s supervisory role could further improve market efficiency. 6️⃣ Financial literacy is essential. More details in our article!

📌 Don't miss out: Join the #StepUpStartups Workshop Discover “Untapped Opportunities for European Venture Capital: Pension Funds and Sovereign Wealth Funds” at the upcoming StepUp Startups #High-#Level #Policy #Workshop. 🗓️ Date: 5th December 2024 📍 Location: European Investment Bank, Luxembourg 🎙 Key Sessions Include: - Insights into the preliminary key findings from our policy report. - Roundtable discussions with experts to identify the barriers that limit Venture Capital Industry in Europe. ➡️ Register now: https://lnkd.in/d6Qc3yEq Barrabés.biz EU-Startups DEEP Ecosystems ESNA - Europe Startup Nations Alliance European Investment Bank (EIB) European Investment Fund (EIF) Caro Rossi, Panagiotis Alex Sevdalis, Chiara Frencia, Jonas Mercier, Dr. Apostolos Thomadakis

OPINION: Could the 28th regime transform Europe’s financial landscape? The 28th regime offers a potential overhaul of Europe’s capital markets with the potential to enhance market integration, reduce fragmentation, and foster cross-border investment – however, it also poses risks, writes Dr. Apostolos Thomadakis, research fellow at the European Capital Markets Institute (ECMI). #opinion #esma #capitalmarkets #fragmentation #crossborderinvestment #28thregime

🇪🇺 𝐈𝐬 𝐄𝐮𝐫𝐨𝐩𝐞 𝐑𝐞𝐚𝐝𝐲 𝐟𝐨𝐫 𝐚 𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧 𝐒𝐄𝐂? 𝐍𝐨𝐭 𝐘𝐞𝐭. The debate around establishing a European Securities and Exchange Commission (#SEC) has intensified, especially after Christine Lagarde’s remarks last year. While the idea of a centralised financial markets supervisor is appealing, my latest article on Global Trading explains why the EU isn’t ready for this leap. Before moving towards a single supervisor, 𝐭𝐡𝐞 𝐄𝐔 𝐦𝐮𝐬𝐭 𝐟𝐢𝐫𝐬𝐭 𝐚𝐝𝐝𝐫𝐞𝐬𝐬 𝐭𝐡𝐫𝐞𝐞 𝐜𝐫𝐢𝐭𝐢𝐜𝐚𝐥 𝐠𝐚𝐩𝐬: 1️⃣ 𝑹𝒆𝒈𝒖𝒍𝒂𝒕𝒐𝒓𝒚 𝑪𝒂𝒑𝒂𝒄𝒊𝒕𝒚 Not all national competent authorities (NCAs) have the same resources or expertise. Without bridging this gap, harmonised supervision will remain an uphill battle. 2️⃣ 𝑰𝒏𝒕𝒆𝒓𝒑𝒓𝒆𝒕𝒂𝒕𝒊𝒐𝒏 EU laws are interpreted differently across Member States, leading to fragmented regulatory practices and arbitrage risks. Binding guidelines from ESMA could help standardise implementation. 3️⃣ 𝑬𝒏𝒇𝒐𝒓𝒄𝒆𝒎𝒆𝒏𝒕 Even with harmonised rules, enforcement varies. Some NCAs are proactive, while others lag behind, creating disparities in market oversight and discipline. 📊 #Single #supervision - harmonising regulatory practices and enforcement across Member States - should be the EU's immediate focus. Once these gaps are addressed, the path to a centralised European SEC will be smoother, more effective and better suited to support the integration of Europe's capital markets. ECMI - European Capital Markets Institute CEPS (Centre for European Policy Studies)

🚀 𝐂𝐨𝐮𝐥𝐝 𝐭𝐡𝐞 𝟐𝟖𝐭𝐡 𝐫𝐞𝐠𝐢𝐦𝐞 𝐭𝐫𝐚𝐧𝐬𝐟𝐨𝐫𝐦 𝐄𝐮𝐫𝐨𝐩𝐞’𝐬 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐥𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞? Europe’s capital markets are at a critical crossroads. The twin challenges of financing the 𝐠𝐫𝐞𝐞𝐧 and 𝐝𝐢𝐠𝐢𝐭𝐚𝐥 transitions, alongside the need to unlock 𝐩𝐫𝐢𝐯𝐚𝐭𝐞 𝐜𝐚𝐩𝐢𝐭𝐚𝐥, demand bold solutions. In my latest article in The TRADE News, I explore the potential of the 28th regime - an optional framework under ESMA that offers: ✅ 𝐒𝐭𝐫𝐞𝐚𝐦𝐥𝐢𝐧𝐞𝐝 𝐜𝐫𝐨𝐬𝐬-𝐛𝐨𝐫𝐝𝐞𝐫 𝐬𝐮𝐩𝐞𝐫𝐯𝐢𝐬𝐢𝐨𝐧 ✅ 𝐑𝐞𝐝𝐮𝐜𝐞𝐝 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐟𝐫𝐚𝐠𝐦𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧 ✅ 𝐄𝐧𝐡𝐚𝐧𝐜𝐞𝐝 𝐩𝐚𝐧-𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐩𝐫𝐨𝐝𝐮𝐜𝐭𝐬 💡 𝐖𝐡𝐲 𝐝𝐨𝐞𝐬 𝐄𝐮𝐫𝐨𝐩𝐞 𝐧𝐞𝐞𝐝 𝐭𝐡𝐢𝐬? Europe’s capital markets remain constrained by: 1️⃣ 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐟𝐫𝐚𝐠𝐦𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧 – National supervisory frameworks hinder pan-European integration, driving up costs and reducing efficiency. 2️⃣ 𝐋𝐢𝐦𝐢𝐭𝐞𝐝 𝐫𝐞𝐭𝐚𝐢𝐥 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫 𝐩𝐚𝐫𝐭𝐢𝐜𝐢𝐩𝐚𝐭𝐢𝐨𝐧 – Unlocking new savings products could mobilise private capital. 3️⃣ 𝐀 𝐬𝐭𝐚𝐥𝐥𝐞𝐝 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐬𝐚𝐭𝐢𝐨𝐧 𝐦𝐚𝐫𝐤𝐞𝐭 – Reviving this could unlock EUR 300-400 billion annually. 🔑 𝐓𝐡𝐞 𝟐𝟖𝐭𝐡 𝐫𝐞𝐠𝐢𝐦𝐞 𝐜𝐨𝐮𝐥𝐝 𝐜𝐡𝐚𝐧𝐠𝐞 𝐭𝐡𝐢𝐬 𝐛𝐲: - Offering a 𝐬𝐢𝐧𝐠𝐥𝐞 𝐬𝐞𝐭 𝐨𝐟 𝐫𝐮𝐥𝐞𝐬 and a 𝐬𝐢𝐧𝐠𝐥𝐞 𝐬𝐮𝐩𝐞𝐫𝐯𝐢𝐬𝐨𝐫 for certain markets. - Boosting 𝐦𝐚𝐫𝐤𝐞𝐭 𝐞𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 and increasing Europe’s attractiveness for investment. - Helping channel 𝐩𝐫𝐢𝐯𝐚𝐭𝐞 𝐜𝐚𝐩𝐢𝐭𝐚𝐥 into Europe’s strategic goals, like sustainability and digitalisation. ⚠️ 𝐁𝐮𝐭 𝐫𝐢𝐬𝐤𝐬 𝐫𝐞𝐦𝐚𝐢𝐧: - 𝐅𝐫𝐚𝐠𝐦𝐞𝐧𝐭𝐚𝐭𝐢𝐨𝐧 𝐫𝐢𝐬𝐤: If some countries opt in while others remain out, it could lead to two-speed markets. 𝐍𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐫𝐞𝐬𝐢𝐬𝐭𝐚𝐧𝐜𝐞: Centralised supervision might face political opposition, complicating integration. 𝐈𝐦𝐩𝐚𝐜𝐭 𝐨𝐧 𝐭𝐡𝐞 𝐂𝐌𝐔: Could the regime inadvertently hinder the broader Capital Markets Union? 🌍 For the 28th regime to succeed, Europe must strike a delicate 𝐛𝐚𝐥𝐚𝐧𝐜𝐞 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐢𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐬𝐨𝐯𝐞𝐫𝐞𝐢𝐠𝐧𝐭𝐲 while promoting a cohesive, globally competitive capital market. ECMI - European Capital Markets Institute CEPS (Centre for European Policy Studies)

🌿 𝙎𝙪𝙨𝙩𝙖𝙞𝙣𝙖𝙗𝙞𝙡𝙞𝙩𝙮 𝙍𝙚𝙥𝙤𝙧𝙩𝙞𝙣𝙜: 𝘼 𝙋𝙖𝙩𝙝 𝙩𝙤 𝙍𝙚𝙨𝙞𝙡𝙞𝙚𝙣𝙘𝙚 𝙖𝙣𝙙 𝙂𝙧𝙤𝙬𝙩𝙝 At the 2024 ECMI Annual Conference, we delved into the evolving landscape of corporate sustainability reporting and the cost of green compliance. With the adoption of the 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗥𝗲𝗽𝗼𝗿𝘁𝗶𝗻𝗴 𝗗𝗶𝗿𝗲𝗰𝘁𝗶𝘃𝗲 (𝗖𝗦𝗥𝗗), Europe has taken a bold step toward harmonising sustainability data and driving the transition to a sustainable economy. Key takeaways: ✅ 𝗘𝗻𝗵𝗮𝗻𝗰𝗲𝗱 𝘁𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝗰𝘆: The CSRD broadens the scope to include SMEs and certain non-EU firms, ensuring stakeholders have reliable, high-quality data to guide strategic decisions. ✅ 𝗧𝗼𝗼𝗹𝘀 𝗳𝗼𝗿 𝘀𝘂𝗰𝗰𝗲𝘀𝘀: Resources like sector-specific standards, materiality flowcharts, and EFRAG’s guidance are empowering businesses to navigate these requirements effectively. ✅ 𝗣𝗵𝗮𝘀𝗲𝗱 𝗶𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻: Larger firms lead the way, creating best practices that SMEs can gradually adopt, mitigating the immediate burden on smaller companies. Challenges persist, particularly for 𝗦𝗠𝗘𝘀, which may struggle with the costs and complexities of compliance. However, the directive introduces 𝘃𝗼𝗹𝘂𝗻𝘁𝗮𝗿𝘆 𝘀𝘁𝗮𝗻𝗱𝗮𝗿𝗱𝘀 for non-listed SMEs and provides tailored support to ensure even smaller businesses can align with sustainability goals. Ultimately, the CSRD is 𝗺𝗼𝗿𝗲 𝘁𝗵𝗮𝗻 𝗮 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗼𝗯𝗹𝗶𝗴𝗮𝘁𝗶𝗼𝗻. It’s an opportunity to integrate sustainability into corporate strategy, driving resilience, value creation, and innovation. With time and adaptation, this framework could cement Europe’s role as a global leader in sustainable growth. How can businesses turn the CSRD into a competitive advantage? CEPS (Centre for European Policy Studies) Imperial College Business School

🚀 𝙏𝙤𝙠𝙚𝙣𝙞𝙨𝙖𝙩𝙞𝙤𝙣: 𝘼 𝙉𝙚𝙬 𝙁𝙧𝙤𝙣𝙩𝙞𝙚𝙧 𝙛𝙤𝙧 𝘾𝙖𝙥𝙞𝙩𝙖𝙡 𝙈𝙖𝙧𝙠𝙚𝙩𝙨 At the 2024 ECMI Annual Conference, we explored the transformative potential of tokenising financial assets by placing traditional securities on distributed ledger technology (DLT). The discussion highlighted how tokenisation could: ✅ 𝗦𝘁𝗿𝗲𝗮𝗺𝗹𝗶𝗻𝗲 𝗶𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 ✅ 𝗕𝗼𝗼𝘀𝘁 𝘁𝗿𝗮𝗻𝘀𝗽𝗮𝗿𝗲𝗻𝗰𝘆 𝗮𝗻𝗱 𝗲𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝗰𝘆 ✅ 𝗢𝗽𝗲𝗻 𝗻𝗲𝘄 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 across a diverse range of financial assets, from carbon credits to private credit and fractional ownership of real estate Speakers likened tokenisation to the leap from paper to electronic securities – and evolution that lowers costs, mitigates risks, and enhances liquidity in underdeveloped asset classes. Tokenised funds and bonds also open doors to 𝗱𝗶𝗴𝗶𝘁𝗮𝗹-𝗻𝗮𝘁𝗶𝘃𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 and 𝗱𝗲𝗺𝗼𝗰𝗿𝗮𝘁𝗶𝘀𝗲𝗱 𝗳𝗶𝗻𝗮𝗻𝗰𝗲. Yet, challenges remain: ⚖️ Regulatory frameworks, like Europe’s CSDR, limit blockchain integration. ⚙️ Lack of standardisation and interoperability hampers adoption. 🔍 Limited data access on private blockchains constrains participation. Meanwhile, global leaders such as Singapore, the UAE, and the US are advancing with flexible regulations and fintech investment. Europe risks falling behind unless it 𝗳𝗼𝘀𝘁𝗲𝗿𝘀 𝗮 𝘀𝘂𝗽𝗽𝗼𝗿𝘁𝗶𝘃𝗲 𝗲𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁 𝗳𝗼𝗿 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗶𝗼𝗻. The path forward includes: 🌍 Standardising blockchain protocols for seamless integration 📚 Educating stakeholders and scaling infrastructure, including stablecoins and CBDCs 🤝 Collaboration to overcome barriers and redefine market operations Tokenisation is more than a buzzword – it’s a blueprint for 𝗯𝘂𝗶𝗹𝗱𝗶𝗻𝗴 𝗮 𝗺𝗼𝗿𝗲 𝗲𝗳𝗳𝗶𝗰𝗶𝗲𝗻𝘁, 𝗶𝗻𝗰𝗹𝘂𝘀𝗶𝘃𝗲 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗲𝗰𝗼𝘀𝘆𝘀𝘁𝗲𝗺. While challenges persist, its potential to reshape capital markets, especially in underserved sectors, is undeniable. What do you see as the biggest hurdle to widespread adoption of tokenisation? CEPS (Centre for European Policy Studies) Imperial College Business School