The EU's new regulations grant banks regulatory advantages for tokenized assets, which may accelerate the development of tokenization in Europe.

[EU new regulations give banks regulatory advantages for tokenized assets, potentially accelerating the development of tokenization in Europe] The legislation passed by the EU last year created significant regulatory advantages for banks to tokenize traditional assets, making their handling more lenient than in most parts of the world. This week, the European Banking Authority (EBA) released its final technical standards, broadly following the guidelines of the Basel Committee on Banking Supervision (BCBS) and mainly applicable to Crypto Assets, but EU legislation overturned the conservative approach to tokenizing traditional assets, treating them equally with traditional assets without any additional conditions. EU banks can handle tokenized securities on any type of Blockchain without additional capital requirements; while banks in other regions following the Basel Committee's guidelines must impose a maximum risk weight of 1250% when holding similar assets on unlicensed networks. This regulatory difference also extends to the stablecoin sector, giving Europe a unique advantage in institutional tokenization and the digitization of TradFi instruments.