The European Securities and Markets Authority (ESMA) is launching a new Union Strategic Supervisory Priority (USSP) focused on digital finance and innovation. This initiative aims to ensure supervisors possess the necessary expertise to oversee emerging technologies like artificial intelligence and tokenisation. ESMA is committed to protecting investors and maintaining robust safeguards within the evolving digital landscape. The USSP will run concurrently with the existing priority addressing cyber and operational resilience. ESMA also plans to tackle challenges posed by advanced AI models. The authority is concluding its USSP on ESG disclosures, which successfully improved sustainability information for investors. This digital innovation priority will remain adaptable to future technological advancements. ESMA uses USSPs to strategically focus supervisory resources on critical EU-wide risks affecting investor protection and financial stability. The goal is to foster innovation while upholding strong market integrity. This marks a significant step in ESMA's ongoing supervision efforts.