German Fintech 21X Gains EU Approval for Tokenization Platform Under DLT Pilot Regime

German fintech company 21X  has received regulatory approval to launch a groundbreaking tokenization platform under the EU’s DLT Pilot Program*. This makes 21X one of the first firms licensed to operate a blockchain-based trading and settlement system in Europe. The license was granted by Germany’s financial supervisory authority, BaFin, and marks a significant milestone in the evolution of tokenized capital markets.

Key Highlights

– Launch Timeline: 21X plans to officially launch its exchange for tokenized financial instruments in the first quarter of 2025, based in Frankfurt.
– Platform Capabilities: The platform will offer services including asset distribution, tokenization, issuance, trading, and settlement of various financial instruments, such as equities, bonds, and real-world assets like real estate.
– Regulatory Framework: The EU’s DLT Pilot Regulation, which came into effect in March 2023, provides a legal framework for trading and settling crypto-related assets classified as financial instruments. This regime allows for innovative market infrastructures like DLT multilateral trading facilities.

CEO’s Statement

Max Heinzle, CEO of 21X, emphasized the significance of this approval: 

“This is more than just a license – it’s a revolutionary moment for capital markets. For the first time, institutional and retail investors can trade and settle tokenized securities on a fully regulated, blockchain-based exchange with the same level of trust, security, and compliance as traditional markets.”

Partnerships and Technology

To enhance its platform, 21X has partnered with several key players:

– Polygon: Utilized for its cost-effective transaction fees and robust security features.

– Chainlink: To improve on-chain financing capabilities.

These partnerships are expected to bolster the platform’s efficiency and scalability.

Market Context

The approval of 21X’s platform aligns with a broader trend towards integrating blockchain technology within traditional finance. The European Securities and Markets Authority (ESMA) has recognized 21X as one of only four companies eligible under the DLT Pilot Regime. This reflects a growing recognition of the potential for blockchain to transform financial services by improving efficiency and reducing costs.

With its license secured after an extensive 18-month application process involving collaboration with BaFin, Deutsche Bundesbank, ESMA, and the European Central Bank (ECB), 21X is poised to lead the charge in digital finance innovation across Europe. As the market for tokenized securities expands—potentially reaching over $30 trillion by 2030—21X is strategically positioned to play a pivotal role in this transformation.