Key Takeaways
- The license allows 21X to launch its exchange for tokenized financial instruments from its Frankfurt headquarters in early 2025.
- 21X is collaborating with partners like Polygon, Apex Group, and SBI Digital Markets to build a comprehensive ecosystem for digital asset markets.
Frankfurt-based digital exchange 21X has obtained a license to operate a blockchain-based trading and settlement platform under EU regulatory oversight. The license, granted by Germany’s financial regulator BaFin, comes under the EU’s Distributed Ledger Technology Pilot Regime (DLTR), a framework designed to facilitate testing and implementation of blockchain-based systems.
The 18-month review process involved multiple entities, including BaFin, the German Federal Bank, the European Securities and Markets Authority (ESMA), and the European Central Bank (ECB).
The license allows 21X to launch its exchange for tokenized financial instruments from its Frankfurt headquarters in early 2025. The platform will support a range of digital assets, including equity, debt securities, and funds, as well as real-world assets like real estate and art. All trading and settlement will occur on a public blockchain, offering enhanced transparency and efficiency.
As per the official press release, by operating on-chain, the firms aims to simplify processes, reduce costs, and minimize risks typically associated with traditional financial systems. Reportedly, Atomic settlement—where matching and settlement occur simultaneously—will be a major feature of the platform, streamlining transactions and eliminating intermediaries.
The company has also been building partnerships to ensure the scalability and security of its platform. 21X is already collaborating with partners like Polygon, Apex Group, and SBI Digital Markets to build a comprehensive ecosystem for digital asset markets.
Commenting on the development, CEO Max Heinzle noted that the license reflects progress in making blockchain-based financial systems mainstream. “This regulatory approval allows us to offer a fully compliant trading platform for tokenized securities, providing both institutional and retail investors with access to these markets under the same standards of trust and security as traditional exchanges,”.
The latest move comes amid industry experts predicting that the tokenized securities market could exceed $30 trillion in trading volume by 2030. Last month, a group of academics in Germany raised concern about the inability to implement MiCAR carries which places Germany in violation of EU law.
MiCAR’s stands for Markets in Crypto-Assets Regulation and it is used to regulate crypto assets in the European Union. In a formal letter to the Bundestag Finance Committee, they warned that the absence of a national implementing law leaves Germany non-compliant with MiCAR, which has been enforceable since June 30.
