EU Inc Would Make Every Share Digital and Tokenization Optional, but the Proposal Never Defines 'Tokenised'
EU Inc would make every share digital and leave tokenization optional, without defining it. It is a proposal, not law: nothing in it applies to you today.
Executive Summary
The Commission’s EU Inc proposal would make every share of the new company form digital, recorded in a register that has constitutive effect, and leave it to each company to choose whether that register runs on a distributed ledger. The text never defines “tokenised”. The one time the word appears, in a recital, it describes how a share certificate might be presented, not how a share is held. The legal title sits in the company’s digital register of shares, and a transfer is effective only once the company has recorded it.
This is a proposal, not law: COM(2026) 321, published on 18 March 2026 and still in the Parliament’s Legal Affairs Committee. For an issuer planning tokenized equity, the draft is technology-neutral by design, puts the company in the loop of every transfer, and asks for shareholder identity inside the register. Those three features decide how a token and a share can relate.
Key Takeaways
- Procedure 2026/0074(COD) stands at “Awaiting committee decision”, with an indicative plenary date of 19 October 2026.
- Shares of an EU Inc would be dematerialised and recorded in a digital register of shares, and registration has constitutive effect (Article 53(1)). There would be no bearer shares (Article 53(3)).
- The articles may provide for issuing, recording and transferring shares using distributed ledger technology or other digital solutions (Article 53(2)).
- “Tokenised” appears once in the whole text, in Recital 38, and is not defined. The proposal does not mention MiCA, crypto-assets or the DLT Pilot Regulation.
- A transfer is effective only when recorded in the register, and the company has three working days to record it or give reasons for refusing (Article 59).
- If adopted, the Regulation would apply 12 months after entry into force. By arithmetic, that cannot be before 2028.
What the Proposal Is, and Where It Stands
The 28th regime is a new, optional company form that exists in the legal order of every Member State. According to the Commission’s explanatory memorandum, an EU Inc can be formed from scratch or through domestic or cross-border conversion, merger or division, and the fast-track route is online, within 48 hours, at a maximum cost of EUR 100. The legal basis is Article 114 of the Treaty on the Functioning of the European Union.
The procedure file at the European Parliament’s Legislative Observatory gives the stages we can verify as of 1 October 2026:
| Date | Stage | Source |
|---|---|---|
| 18 March 2026 | Commission publishes the proposal, COM(2026) 321 | Observatory file 2026/0074(COD) |
| 23 April 2026 | René Repasi (S&D) appointed rapporteur, Legal Affairs Committee (JURI) | Observatory |
| 18 May 2026 | Committee referral announced in Parliament | Observatory |
| 29 June 2026 | JURI draft report (PE790.143) | Observatory |
| 15 July 2026 | Opinion of the Economic and Monetary Affairs Committee (PE788.878) | Observatory |
| 22 July 2026 | Amendments tabled in committee | Observatory |
| 11 September 2026 | Opinion of the Employment and Social Affairs Committee | Observatory |
| 19 October 2026 | Indicative plenary sitting date, first reading | Observatory forecast |
Two cautions. The plenary date is a forecast, and forecasts move: an earlier edition of the Parliament’s Legislative Train page, updated on 1 August, gave 5 October. And the Observatory lists no Council position. A third-party tracker, citing the Parliament’s committee webstream, reports that the Irish Presidency told the committee on 7 September that it wants a Council negotiating mandate as soon as possible and trilogue negotiations in November. That is a stated target, from a secondary source, not a scheduled stage.
What “Tokenised Form” Says, and What It Does Not
We searched the full text of the proposal for “tokenised”, “distributed ledger”, “DLT” and “blockchain”. There are three hits in 134 pages: two in Recital 38 and one in Article 53(2).
Recital 38. Each company should be responsible for establishing and updating its digital share register, and it should be possible to delegate that task to a third party. The requirements for shares, the register and the share certificate “should be understood as technologically neutral”. Provided the company meets the requirements, it should be free to choose how to establish and maintain the register, “including the choice of whether to use distributed ledger technology for this purpose or not and whether digital share certificates should be provided in tokenised form or not”.
Article 53(2). The articles of association “may provide that shares are issued, recorded and transferred using distributed ledger technology or other digital solutions”.
Read together, the structure is clear. The ledger choice is about the register and the transfer mechanism, and it is made in the articles. The word “tokenised” belongs to the certificate, which is a document the company issues from the register. The proposal does not define “tokenised”, does not say what a token is, and does not say whether a tokenised certificate can carry rights by itself. A search of the text for the Markets in Crypto-Assets Regulation, for crypto-assets and for the DLT Pilot Regulation returns nothing. The Markets in Financial Instruments Directive appears only in the definitions of a multilateral trading facility and a regulated market.
By our reading, the missing definition is a feature of a technology-neutral text. If you read “tokenised shares” into the proposal, you are importing a meaning the drafters left open.
What the Register Must Contain, and Who Controls It
The articles that decide how a token could relate to a share are short. We list them with the plain meaning of each.
| Provision | What it says | Why it matters for a tokenized share |
|---|---|---|
| Article 53(1) | Shares are dematerialised and recorded in a digital register of shares. Registration has constitutive effect and evidences ownership | The register entry is the title. A token is, at most, a representation of it |
| Article 54(1) | Register contains at least shareholder identity and address, a share identifier, the date of subscription, the transfer sequence number, the class, and any encumbrances, pledges or restrictions | Identity sits in the register. Transfer restrictions are recorded there too |
| Article 54(2) | Register accessible to any shareholder and to others with a legitimate interest, in accordance with the General Data Protection Regulation | Openness is limited by data protection, not by technology |
| Article 54(3) to (5) | A digital share certificate on request and after each transfer, carrying an extract of the register, a timestamp, and a qualified electronic seal or signature | This is the object the recital says may be tokenised |
| Article 56(1) | Shareholder rights take effect upon entry into the register | Rights follow the entry, not the token |
| Article 58(1) | Shares are freely transferable unless the articles say otherwise | Restrictions come from the articles and are recorded in the register |
| Article 59 | Transfer can be concluded fully online. It is effective only once recorded. The company verifies title and compliance with the articles, then registers or refuses with reasons within three working days | The company is a gatekeeper on every transfer |
Two features stand out to anyone coming from tokenization.
First, the company stays in the loop. Article 59(7) and (8) have the company review the documentation, verify the transferor’s title and compliance with the articles, and either register the transfer or tell the parties why not. A transfer that settles instantly between two wallets, with no company step, is not the model the proposal describes. A design in which the company, or a delegate it appoints, runs the ledger and applies the articles’ rules as part of recording the transfer is closer to the text.
Second, the register carries identity. Article 54(1)(a) lists the identity and address of all shareholders. A register of pseudonymous addresses does not meet that on its own. How a ledger that is public, or that cannot be edited, fits with the General Data Protection Regulation is a question we take up separately in this series.
A third observation concerns signatures. Article 59(3) and (4) name qualified electronic seals and signatures under the eIDAS Regulation, and advanced ones where accompanied by verified identity. “Business Wallets” in the text are the European Business Wallets of the eIDAS framework, not crypto wallets. We found no provision that mentions a wallet signature of the kind a token transfer uses. By our reading, a transfer instruction signed with a wallet key is not one of the forms the text names, so the articles and the company’s own procedures would have to bridge that gap.
What It Means for Companies That Want Tokenized Shares
The proposal does not create a tokenized-equity regime. It creates a company form whose share law leaves room for one.
What it gives you. A harmonised statute with a digital share register that can run on a ledger, no notarial deed for transfers (Article 59(5)), free transferability by default, share classes with different rights (Article 55), and a register that records encumbrances and restrictions.
What it leaves to other law. Whether the instrument is a financial instrument, what disclosure applies when you offer it, and where it may trade. The recitals say so directly: admission to a multilateral trading facility or a regulated market must comply with all applicable Union and national law (Article 60 and Recitals 41 and 42), and they name the Market Abuse Regulation, the Prospectus Regulation and the multiple-vote share directive among the rules that continue to apply. The first article in this series, MiCA or MiFID: your token’s rights decide, covers the classification question. A token that carries share rights is a financial instrument question, and the EU Inc text does not move it.
What it does not decide. Whether a chain can be the register. The proposal lets the articles choose ledger technology for recording and transfer, and it lets the company delegate the register to a third party, but it sets no technical standard for a ledger. Recital 38 and Article 53(2) are permissions, not a specification.
By our reading, the strongest use of the text today is as a design brief. If your capital will be raised through an EU Inc, the shape that fits the draft is a company-controlled register, with the ledger or the token as a way to record and evidence entries, and the articles of association written to say which.
Timeline: What Decides Today and When
Nothing in the proposal applies today. The decisions that exist now are national.
According to Article 109 of the proposal, the Regulation enters into force on the twentieth day after publication in the Official Journal and applies from the last day of the twelfth month after that. The bracketed wording is a Publications Office placeholder, and Recital 87 states the same 12 months. Even if the political target of agreement by end of 2026, reported by the same tracker, were met, publication would follow legal-linguistic finalisation, and the arithmetic puts the application date in 2028 at the earliest. These are our reading of the proposal’s own provisions, not a forecast.
What that means for planning: you cannot issue EU Inc shares today, the text may change in the Parliament and the Council, and the Observatory lists no committee vote yet. We have not read the Parliament’s draft report, the ECON opinion or the tabled amendments on these articles, because the Parliament’s document server did not open for us. Whether any of them touches Articles 53 and 54 or Recital 38 is unknown to us, and you should check the committee documents listed in the Observatory before relying on this text.
How It Compares With a National Regime: Germany
Germany is the one national text we read at source, so it is the only comparison we make. The Act on Electronic Securities, the eWpG, in the version shown on the official federal legal portal after its amendment of 4 February 2026, shows the contrast.
| EU Inc proposal | German eWpG | |
|---|---|---|
| Status | Proposal, COM(2026) 321 | In force since 10 June 2021 |
| Scope | One company form, its shares | Bearer bonds, registered shares and bearer shares in a central register (Section 1) |
| Form of the share | Dematerialised, recorded in the digital register (Article 53) | An electronic security is issued by entry in an electronic securities register instead of a certificate, with the same legal effect as a paper security (Section 2) |
| Register types | One digital register of shares, technology-neutral | Two: the central register (Section 12) and the crypto securities register (Section 16) (Section 4) |
| Ledger requirement | None specified; DLT is optional and chosen in the articles | A crypto securities register must be kept on a tamper-proof recording system that logs data in time order and protects it against unauthorised deletion and later change (Section 16(1)) |
| Who keeps the register | The company, or a third party it delegates to | The party the issuer names to the holder, and the issuer itself if none is named (Section 16(2)) |
By our reading, the difference is one of method. The German law names a ledger-based register as a category and states a technical requirement for it. The EU proposal gives the company a free choice of technology and names no such category, and it puts the transfer step with the company. Under the proposal, the place for a chain would be whatever the articles and the company’s procedures establish. Other national regimes may differ, and we have not compared them.
The Record View
A statement such as “this company is ready to issue shares in tokenized form” is easy to write and hard to check. In Stobox Intelligence, readiness is built to be held as a record, not as a score. Each fact about an issuer is a separate record: the legal form, where the share register is kept and in what technology, whether the articles of association allow ledger recording, which statute or proposal each fact rests on, and the date it was entered. Each carries a link to its source document and an evidence level that shows how far it was checked against that document.
The EU Inc proposal itself would be such a record: a Commission proposal, entered with its date, its status “proposal, not law” and the Observatory file as the source. When the Parliament or Council changes a provision, a dated record sits beside the old one, and nothing is averaged into a percentage. That is the size of the schema, not a count of EU Inc facts and not a readiness score.
Design Note: Stobox Orbit
Stobox Orbit, a permissioned tokenization protocol, is in development and running on testnet (Base Sepolia). It has not been designed against the EU Inc proposal and makes no claim of compliance with it or with any regulation.
What its documents do cover is the question this article turns on: is the chain the register, or a copy of one?
- Two register modes, for funds. A decision recorded on 27 September 2026 (R40) states that the chain is the register of record, or a mirror of the registrar’s register, per fund, and that both modes are built. Orbit is designed so that a fund admin records the mode. The default is mirror until counsel confirms, jurisdiction by jurisdiction, that the token is the register.
- Shares are further behind. The Orbit instrument profiles list register status for a share-type instrument as partial, with the mirror mode planned, and the register-mode record exists in code for funds only.
- Pseudonymous register. Under another decision (R41), no identifying data and no document content sit on chain. Holdings are visible per pseudonymous subject. By our reading, that design would sit with the mirror mode against a register that carries identity, such as the one Article 54(1)(a) describes.
- A registrar-style correction. Orbit is designed so that a correction beyond the rules is an administrative act of the compliance officer, with a reason, recorded as an event. The proposal leaves rectification of the register to national law (Article 59(10)).
What to Do on Monday
- Ask the question that decides everything. For any equity you plan to issue in tokenized form, write one line: is the chain the register of record, or a record that mirrors a register kept elsewhere? The proposal makes the company’s digital register the title, so the answer shapes your documents either way.
- Do not read “tokenised shares” into the draft. If a platform or adviser says EU Inc “allows tokenized shares”, ask which article they mean. Article 53(2) allows DLT recording if the articles say so, and Recital 38 mentions tokenised certificates. Neither defines a token.
- Plan the identity layer. The register must carry shareholder identity and address (Article 54(1)(a)). Decide where that data lives, who controls it and how the ledger relates to it before choosing a technology.
- Put the transfer step on paper. Article 59 gives the company three working days to record or refuse. Write down who applies the articles’ restrictions, how fast, and how that fits with whatever settlement speed you promise investors.
- Track the committee documents, not the headlines. The Observatory file 2026/0074(COD) lists the draft report, the opinions and the amendments. Check Articles 53, 54 and 59 and Recital 38 in them, and the plenary date, before you rely on this text. Then take the structure to a qualified lawyer in the Member State where you would register.
FAQ
Does the EU Inc proposal allow shares to be issued as tokens? It allows a company to record and transfer shares using distributed ledger technology if its articles say so (Article 53(2)). “Tokenised” appears once, in Recital 38, about digital share certificates, and is not defined.
Is EU Inc law today? No. It is a Commission proposal of 18 March 2026. As of 1 October 2026 the Legal Affairs Committee has not voted and we found no published Council mandate. If adopted, it would apply 12 months after entry into force.
Would a token transfer on a blockchain transfer the share? By our reading, not on its own. A transfer takes effect once recorded in the company’s digital register of shares (Article 59(6)), and the company has three working days to record it or give reasons for refusal.
How does this differ from Germany’s eWpG? The German law names a ledger-based register, the Kryptowertpapierregister, with a technical requirement in Section 16. The EU Inc text is technology-neutral and names no such category. We compared Germany only.
To see how a readiness question looks as a record, look at Stobox Intelligence; Stobox Orbit’s documentation will follow when it is public.
Related reading in this series
- MiCA or MiFID: how to tell which regime your token falls under
- The DLT Pilot cap: what EU ministers decide on 9 October
- Pontes: central bank money for tokenised securities
- Background: Tokenization, the EU tokenization guide, the German guide and the glossary
- Next in the series: significant crypto-asset service providers and ESMA supervision from 2027.
Sources
Accessed 1 October 2026.
- European Commission, Proposal for a Regulation on the 28th regime corporate legal framework, “EU Inc.”, COM(2026) 321 final, 18 March 2026 (Recital 38, Articles 2, 53, 54, 56, 58, 59, 60, 109): https://commission.europa.eu/document/download/3e9822aa-8cef-40a1-904e-a53fc68e7265_en?filename=Proposal+for+an+EU+Inc+corporate+legal+framework.pdf
- European Commission, EU Inc.: A new harmonised corporate legal regime: https://commission.europa.eu/topics/business-and-industry/doing-business-eu/company-law-and-corporate-governance/eu-inc-new-harmonised-corporate-legal-regime_en
- European Parliament, Legislative Observatory, procedure file 2026/0074(COD): https://oeil.europarl.europa.eu/oeil/en/procedure-file?reference=2026/0074(COD)
- European Parliament, Legislative Train Schedule, The 28th Regime, edition of 1 August 2026: https://www.europarl.europa.eu/legislative-train/theme-a-new-plan-for-europe-s-sustainable-prosperity-and-competitiveness/file-28th-regime-for-innovative-companies
- the28thregime.eu, timeline of September 2026 (third-party tracker, secondary source for the Presidency’s stated targets): https://the28thregime.eu/progress
- Gesetz über elektronische Wertpapiere (eWpG), Section 1: https://www.gesetze-im-internet.de/ewpg/__1.html
- eWpG, Section 2: https://www.gesetze-im-internet.de/ewpg/__2.html
- eWpG, Section 4: https://www.gesetze-im-internet.de/ewpg/__4.html
- eWpG, Section 16: https://www.gesetze-im-internet.de/ewpg/__16.html
This article is general information based on public documents. It is not legal advice. Consult qualified counsel before making decisions about a specific issuance.
