As Tokenized Securities Scale, Market Fragmentation Emerges as Wall Street’s New Challenge

In June 2025, the European Securities and Markets Authority reported that the EU’s Distributed Ledger Technology Pilot Regime had authorized only three market infrastructures and had seen minimal live trading. Tokenized securities, or financial instruments represented on blockchain networks, are being developed by banks, exchanges and asset managers. Because the same asset can trade across multiple platforms, liquidity can split and investors can face inconsistent prices, settlement arrangements and ownership rights. ESMA cited interoperability, access to central bank money and limits on eligible asset types and volumes, and recommended adjustments to encourage broader participation.