A complex regulatory environment makes it difficult for European founders to obtain funding through venture capital, prompting them to explore tokenization alternatives.
European Fundraising Challenges
The number of active venture capitalists in Europe has dropped by 30% over the past two years. VC fundraising has also declined from €34 billion in 2022 to €21 billion in 2024. This creates significant hurdles for founders, especially as the focus shifts to profitability over rapid growth.
International Tokenization Context
Countries like the USA, Singapore, and some MENA regions are thriving due to low entry barriers and conducive tokenization conditions. Issuers in these countries can avoid registering prospectuses or obtaining licenses, broadening access to international investors and simplifying token issuance. Meanwhile, Europe faces significant barriers due to its diverse regulatory restrictions.
Future of Tokenization in Europe
Despite challenges, Europe presents significant investment opportunities. However, realizing these requires revisiting corporate and security laws to facilitate easier tokenization and investments in private companies. This could stimulate investment activity and support Europe’s economy in a global context.
Europe is at a crossroads: should it follow the example of global tokenization leaders or continue along current regulatory paths? Revising the regulatory framework could significantly enhance Europe's position in the global tokenization context.
