The European Securities and Markets Authority (ESMA) has issued a warning regarding tokenized stocks, highlighting potential risks for retail investors. Natasha Cazenave, ESMA's Executive Director, stated that these digital assets, which are linked to the share prices of listed companies, might create a false sense of ownership among investors. Many tokenized stock products in the EU do not provide actual shareholder rights, such as voting or dividend rights, leading to possible misconceptions about ownership. Cazenave pointed out that while tokenization offers benefits like fractional trading and continuous market access, the lack of transparency and ownership rights poses significant risks. Despite the potential for tokenization to modernize finance by reducing costs and expanding asset access, Cazenave noted that current projects are often limited in scale and liquidity, not yet delivering the efficiency gains promised by advocates.