21X secures BaFin license for tokenized asset exchange

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Mirjan Hipolito

03.12.2024

21X secures BaFin license for tokenized asset exchange — 21X receives EU blockchain license for tokenized trading

German fintech company 21X becomes the first entity to obtain a license for a blockchain-based trading and settlement platform regulated under European Union (EU) law.

The license, issued by Germany's financial supervisory authority BaFin, represents a landmark achievement for global tokenized capital markets and lays the foundation for a new era in financial trading.

With this regulatory approval, 21X is officially recognized as a financial institution and plans to launch its blockchain-based exchange for tokenized financial instruments in Frankfurt in early 2025, according to GlobeNewswire. The platform will support a wide range of tokenized assets, including equities, debt securities, funds, and real-world assets (RWAs) such as real estate and artworks.

Transforming financial markets with blockchain

Operating on a public, permissionless blockchain network, the 21X exchange will offer a fully integrated platform for asset tokenization, issuance, distribution, trading, and settlement. The EU's robust regulatory framework ensures these operations maintain the same levels of trust, security, and compliance as traditional financial markets.

“This is more than just a license — it’s a revolutionary moment for capital markets,” said Max Heinzle, CEO of 21X.

“The EU regulatory framework is key to mass adoption of tokenized money and assets. It provides self-custody, eliminates clearing and settlement risks, and removes unnecessary complexities by reducing intermediaries — all leading to widespread efficiency gains and significantly lower costs,” he added.

Supported by rigorous regulatory oversight

The license was granted under the EU's Distributed Ledger Technology Pilot Regime (DLTR), a framework designed to promote innovation in blockchain-based trading systems. The approval process involved 18 months of collaboration between 21X, BaFin, the Deutsche Bundesbank, the European Securities and Markets Authority (ESMA), and the European Central Bank (ECB).

The DLTR enables companies like 21X to harness blockchain's potential for listing and trading natively tokenized securities.

Building the future of capital markets

21X is already collaborating with industry leaders, including Polygon, Apex Group, and SBI Digital Markets, to create a comprehensive ecosystem for digital asset trading. Through its partnership with Polygon Labs, the company is leveraging a scalable and secure blockchain infrastructure for seamless on-chain transactions.

Analysts predict the tokenized securities market could exceed $30 trillion in trading volume by 2030, driven by blockchain’s efficiency and growing adoption. The 21X exchange aims to position itself as a cornerstone of this rapidly expanding sector.

As it prepares for its 2025 launch, the company seeks to attract global financial institutions interested in listing diverse assets on the first fully EU-regulated exchange for tokenized securities.

In a strategic move advancing digital finance, Swift, UBS Asset Management, and Chainlink recently joined forces in a pilot project under the Monetary Authority of Singapore’s (MAS) "Guardian" program, testing tokenized fund settlements within traditional financial structures.

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