A top European Commission adviser is pushing regulators to put tokenized real-world assets ahead of decentralized finance rules when setting the bloc's next crypto priorities. Peter Kerstens, who advises the commission on digital finance, argues that markets for tokenized stocks, bonds, and other traditional assets offer more immediate promise than the sprawling and risky DeFi sector. His comments come as Brussels drafts its 2025-2029 financial services agenda.
Why real-world assets get the nod
Tokenization — converting ownership of a physical or traditional financial asset into a digital token on a blockchain — has quietly gained traction among mainstream banks and asset managers. Unlike DeFi, which operates largely outside existing regulatory frameworks and has been plagued by hacks and collapses, tokenized real-world assets can be fitted into current securities and custody laws. Kerstens believes that prioritizing this track could attract institutional capital and deliver tangible economic benefits without waiting for a wholesale rewrite of crypto rules.
The adviser's stance represents a clear bet: that the EU will get more bang for its regulatory buck by smoothing the path for tokenized bonds, funds, and commodities than by trying to tame the freewheeling DeFi ecosystem. Under his preferred approach, the commission would channel resources into clarifying how tokenized assets fit under MiFID II, the Markets in Crypto-Assets Regulation (MiCA), and settlement finality rules — rather than designing bespoke DeFi legislation from scratch.
A quieter lane for DeFi
That does not mean DeFi would be ignored, but it would slip down the to-do list. Kerstens's view implies that for now, the EU should let MiCA's existing crypto-asset service provider rules act as a backstop for DeFi activities, while monitoring the sector for systemic risks. The logic: DeFi's global, pseudonymous nature makes it harder to regulate in a single jurisdiction, and premature heavy-handed rules could push innovation offshore without improving consumer protection.
Some industry participants have warned that sidelining DeFi could leave Europe lagging in a technology that may eventually underpin much of finance. But Kerstens appears to side with regulators who think the immediate upside lies in making traditional markets more efficient through tokenization — reducing settlement times, lowering costs, and enabling fractional ownership of high-value assets.
What comes next
Kerstens's comments are not official EU policy, but they carry weight inside the commission's digital finance unit. His team is expected to feed these recommendations into a broader policy paper due later this year, which will outline legislative priorities for the next commission term. That paper will compete with other agendas — including green finance and digital euro plans — for space on the legislative calendar.
The adviser's intervention highlights a growing split in European crypto thinking. Some member states and the European Central Bank want tighter DeFi controls after the FTX collapse and the Terra-Luna crash. Others, including parts of the commission, worry that over-regulating the frontier could hand an advantage to the U.S., the U.K., and Asia. Kerstens's proposed middle ground — fast-track tokenized assets, slow-walk DeFi — could become the working compromise.
For now, the ball sits with the commission's directorate-general for financial stability, which will draft the final priority list. Kerstens and his team will spend the coming months lobbying national regulators and MEPs to make sure tokenization doesn't get buried under competing demands.
