The German fintech 21X is the first entity to receive the EU license for the new upcoming trading platform, completely based on blockchain. In this way, the tokenization of the financial instruments subject to the exchange is fully regulated.
21X: the trading platform based on blockchain and tokenization become regulated
21X has obtained the EU license to soon launch its new fully blockchain-based trading platform.
In this way, the tokenization of financial instruments, subject of the exchange, become for the first time fully regulated.
Read all about it here: 21X secures historic EU license to launch the first fully regulated blockchain-based trading venue – 21X pic.twitter.com/zO07KJ4xBf
— 21X – European DLT Exchange (@tradeon21x) December 3, 2024
In practice, 21X has become the first entity ever to receive a license to operate with a fully regulated blockchain-based trading system, in accordance with European Union (EU) law.
Granted by the BaFin, the German financial supervisory authority, this license marks a milestone for tokenized capital markets globally.
Specifically, the expected date for the launch of the new platform with tokenization for financial instruments will be in the first quarter of 2025.
21X and tokenization on fully regulated blockchain in the EU
21X has specified that it will offer the trading and settlement of tokenized securities. Among others, there are equity and debt securities, funds, real-world assets (RWA) such as real estate or artworks that qualify as eligible financial instruments.
The fintech company has worked with its partners such as Polygon, Apex Group, and SBI Digital Markets. Specifically, with Polygon Labs, 21X is leveraging the scalability and security of a public blockchain network to execute transactions and settlements on-chain.
Thanks to the blockchain, 21X will provide an end-to-end platform that includes asset tokenization, issuance, distribution, listing, and trading, all within the robust regulatory framework established by the EU.
In this regard, Max Heinzle, CEO of 21X, commented:
“For the first time, institutional and retail investors can trade and settle tokenized securities on a fully regulated and blockchain-based exchange with the same level of trust, security, and compliance as traditional markets. The EU regulatory framework is the key to unlocking the mass adoption of tokenized money and assets. It enables self-custody, eliminates clearing and related settlement risks, removes unnecessary complexities by reducing intermediaries – all leading to widespread efficiency gains and significantly lower costs. With advantages like these, 21X is not just building an exchange, but the market infrastructure for the future of on-chain capital markets.”
The license to 21X was issued under the DLT Pilot Regime (DLTR) of the EU, a regulatory project aimed at enabling the experimentation and operation of trading systems based on DLT. This process lasted 18 months involving 21X, BaFin, the German Federal Bank (Deutsche Bundesbank), the European Securities and Markets Authority (ESMA), and the European Central Bank (ECB).
Advances in crypto Regulation in Europe
The crypto regulation in Europe continues to advance, even if it’s not exactly all “roses and flowers.”
In fact, while 21X has obtained its EU license to operate with its blockchain-based trading and asset tokenization platform, others are encountering some difficulties.
With the MiCA regulation, which will come into effect on December 30, some crypto companies are reviewing some of their programs.
For example, Coinbase has blocked its yield program on USDC deposits for European users.
Not only that, staying on the topic of stablecoins, Tether (USDT) also seems to have adaptation issues with MiCA, to the point that there is the risk that it could be delisted in Europe. Specifically, exchanges might have to remove USDT from European users.
