Paris, October 2025 — France has taken a major step toward blockchain-integrated finance with a €6 billion experiment to test the trading of tokenized securities. This groundbreaking initiative allows regulated “stocks on chain” under government supervision and is part of Europe’s broader push to modernize capital markets through distributed ledger technology (DLT).
France Tests Tokenized Securities Under European DLT Pilot Regime
The project falls within the European DLT Pilot Regime, a sandbox program that grants temporary exemptions from certain traditional financial rules to encourage innovation. Through this framework, France’s regulators and market participants will experiment with tokenized stocks, bonds, and other securities—while maintaining strict oversight to protect market integrity and investors.
Supporters believe tokenization could transform how markets function by:
- Reducing friction in cross-border trading.
- Shortening settlement times from the typical T+2 to near-instant.
- Enabling fractional ownership and extended 24/5 trading windows.
These capabilities are already being explored by crypto platforms and hybrid brokerages across Europe, signaling growing convergence between digital assets and traditional finance.
Regulators Balance Innovation With Caution
Despite the enthusiasm, regulators remain wary. The European Securities and Markets Authority (ESMA) cautions that many tokenized “stocks” circulating today represent synthetic assets rather than true equity ownership. This raises potential confusion over shareholder rights such as voting, dividends, and legal claims.
Additionally, liquidity management poses challenges. Off-hour trading and weekend activity could strain hedging systems when underlying markets are closed. To mitigate such risks, France’s pilot will reportedly include:
- Capital and liquidity buffers.
- Limits on trading volumes.
- Restrictions on eligible token types.
- Gradual, phased rollouts to control exposure.
These guardrails aim to balance experimentation with financial stability, ensuring the test environment remains safe and transparent.
A Defining Moment for Blockchain in Capital Markets
If France’s DLT experiment succeeds, it could mark a turning point for blockchain in mainstream finance—merging the efficiency of digital assets with the rigor of regulated markets. Proponents hope the findings will influence permanent EU regulations, transforming today’s temporary sandbox into a long-term framework for tokenized finance.
Still, widespread adoption faces hurdles. Cross-border alignment on investor protection, custody, and interoperability remains essential before tokenized stocks can scale across Europe. The coming months will reveal whether France’s €6 billion bet sets a blueprint for next-generation capital markets—or underscores the difficulties of merging legacy systems with blockchain innovation.
