Under the European Union’s Distributed Ledger Technology (DLT) Pilot Regime, it is its blockchain-based tokenization platform.
With this license, handed down by Germany’s financial regulator, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), 21X is one of the first to be authorized to run a fully regulated blockchain trading and settlement system.
21X announced in a press release on Tuesday that it will ‘radically transform’ the world of capital markets through tokenizing, issuing, distributing, listing, and trading tokenized financial instruments. The platform, which will have headquarters in Frankfurt, is set to be launched in the first quarter of 2025.
DLT Pilot Regime Enabling Blockchain In Financial Markets
The DLT Pilot Regime has established a legal backdrop for crypto assets treated as financial instruments under the Markets in Financial Instruments Directive and Regulation (MiFID II) as of March 2023. This path leads to blockchain infrastructures in multilateral trading facilities and settlement systems.
The approval took 21X 18 months of collaboration with the German Federal Bank (BaFin), the European Securities and Markets Authority (ESMA), and the European Central Bank, but it ultimately went in 21X’s favor.
‘We are truly beyond simply a license – this is quite literally a game changer for capital markets,’ remarked Max Heinzle, Founder and CEO at 21X, ‘launching the world’s first fully regulated blockchain-based exchange where institutional and retail investors can trade and settle tokenized securities in the same way that participants in traditional markets trust, secure and compliantly transact.’
For this reason, 21X has collaborated with leading technology and finance companies, such as Polygon, Apex Group, and SBI Digital Markets, to enhance its blockchain ecosystem.
Polygon wasn’t the first choice as an alternative chain to the core Ethereum network, thanks to low transaction costs, fast processing speeds, and good security. However, Polygon scaling is helping to offer seamless on-chain traders and settlements on the platform through the partnership.
Additionally, Chainlink, a major service in Web3, joined with 21X. Chainlink’s technology will be integrated into its platform to add reliability and efficiency to on-chain financial transactions.
It brings a wider trend of blockchain integration to Europe’s world’s traditional financial systems.
The European Securities and Markets Authority (ESMA) has singled out 21X out of at least four applicants approved by the EU’s DLT Pilot Regime. Spaces developments include the Czech Republic’s CSD Prague getting the same approvals in October 2023.
As the EU edged closer to blockchain adoption in mainstream finance, 21X’s licensed platform stood out as a front-runner in the continent. With a few days to go before the official launch, the company will launch to bring institutional and retail investors secure and compliant blockchain-based trading.
