#19 — Capital Markets Weekly Review
TL;DR: European policymakers called for deeper capital market integration this week as 3.6 trillion euros remain in German savings accounts, while tokenization infrastructure advanced with multiple cross-border settlement pilots and planned production launches. European fintech funding declined over 70% from 2021 peaks as companies focused on profitability and consolidation.
European Capital Markets and Policy Developments
German Finance Minister and Vice Chancellor Lars Klingbeil spoke at the OMR Festival in Hamburg on 6 May, identifying 3.6 trillion euros in German accounts as an obstacle to Germany's and Europe's competitiveness against the United States. Klingbeil called for the development of a European capital market, according to DAS INVESTMENT. Deutsche Bank CEO Christian Sewing also appeared at the same event.
The European Central Bank released a report identifying structural barriers that impede capital market integration across the eurozone, according to Hellenic Shipping News. The report identified structural barriers that impede capital market integration across the eurozone.
Germany's new Altersvorsorgedepot (AVD), a state-subsidized retirement savings account, will replace the Riester pension scheme on 1 January 2027, according to Payment and Banking.
Euronext announced on 8 May the launch of the testing phase for its European Central Securities Depository expansion, according to a company press release. The initiative aims to build a more efficient and integrated post-trade environment for clients across Europe.
Sources
- dasinvestment.com: Vizekanzler Lars Klingbeil fordert: „Europas Kapitalmarkt muss jetzt kommen"
- hellenicshippingnews.com: ECB flags structural barriers slowing euro zone capital market integration
- paymentandbanking.com: Altersvorsorgedepot-as-a-Service: Wie Finanzdienstleister die Chancen nutzen können
- finextra.com: Euronext commences tests of planned CSD expansion
Tokenization Infrastructure and Cross-Border Settlement
The Depository Trust & Clearing Corporation announced on 4 May that it plans to facilitate limited production trades of tokenized real-world assets in July before a wider launch in October, according to PYMNTS. The service will tokenize real-world assets using DTCC's infrastructure.
JPMorgan, Mastercard, and Ripple completed the first cross-border tokenized US Treasury transfer via the XRP Ledger, according to Cointelegraph. The transaction used both blockchain and banking rails, building on an earlier pilot in which the same fund moved between a public and permissioned blockchain.
Ondo Finance worked with Kinexys by JP Morgan, Mastercard, and Ripple to complete the first near real-time cross-border, cross-bank redemption of a tokenized US Treasury fund, according to Finextra. The transaction demonstrated interoperability between different banking systems and blockchain networks.
Federal Reserve Governor Lisa Cook stated on 2 May that tokenization could improve efficiency across the financial system, including faster settlement times and more effective recordkeeping, according to American Banker. Cook said these advantages will take place within traditional finance rather than supplanting it.
On-chain real-world asset value has crossed $26 billion excluding stablecoins, according to a Finextra blog post analyzing 2026 market data.
Sources
- pymnts.com: DTCC Targets October Launch for Tokenization Service
- cointelegraph.com: JPMorgan, Mastercard make first cross-border US Treasury transfer via XRP Ledger
- finextra.com: Ondo completes first cross-border, cross-bank redemption of tokenised US treasuries
- americanbanker.com: Fed's Cook: Tokenization won't replace traditional finance
- finextra.com: Tokenized Real-World Assets: Reading the 2026 Numbers Behind the Headline Growth
Fintech Consolidation and Market Dynamics
Europe's fintech sector is moving from venture-capital-driven growth to a focus on profitability, consolidation, and platform-based models, according to Consultancy.eu. Total fintech funding has declined over 70% from 2021 peaks, falling from $65 billion to $16 billion by 2025. That's a drop from $65 billion to $16 billion. In the first half of 2025, European fintech deals above $100 million reached $3.9 billion, nearly double 2024's total. According to Consultancy.eu, single-product and subscale players face strategic pressure to consolidate, while companies with deeper integration into financial systems and broader platform capabilities are emerging as competitive winners.
Institutional digital asset platform Bullish struck a $4.2 billion deal to buy transfer agent and shareholder services provider Equiniti, according to Finextra.
Block reported earnings showing a growth pickup, according to MarketWatch. The company stated that 100% of Block employees now use AI at work, three months after the company's mass-layoff announcement.
Sources
- consultancy.eu: Europe's FinTech scene entering phase of financial discipline and consolidation
- finextra.com: Bullish to buy Equiniti for $4.2bn in tokenisation push
- marketwatch.com: Block earnings show a growth pickup, in a potential validation of the massive AI push
Technology and Infrastructure Developments
Boston Consulting Group released a report stating that the CIO is now the most important role in a bank, according to The Finanser. According to the report, the CIO role has evolved from keeping core systems stable and costs controlled to running the future of the bank.
Finextra published analysis on the hidden risks of incremental payment modernization, examining what strategic capabilities executives must invest in to prevent rising real-time payment volumes from becoming systemic or reputational failures.
A Finextra blog post examined the white-label paradox in banking infrastructure, analyzing why banking infrastructure represents both an opportunity and a trap for fintech companies.
Sources
- thefinanser.com: The CIO is no longer running IT … they're running the future of the bank
- finextra.com: On-Demand – Patch and perish: The hidden risks of incremental payment modernisation
- finextra.com: The White-Label Paradox
Co-authored by Claude.