In a major win for blockchain innovation, 21X, a German fintech firm, has secured regulatory approval to launch its blockchain-based tokenization platform. The license, granted by Germany’s financial watchdog BaFin, paves the way for 21X to establish a regulated exchange for tokenized financial instruments—bringing the future of digital securities to life in Europe.
Set to launch in early 2025, this groundbreaking platform will allow both institutional and retail investors to trade and settle tokenized securities with the same regulatory compliance and security as traditional financial markets. It’s a game-changer for the blockchain and crypto space, signaling the integration of decentralized technologies into mainstream finance.
Let’s take a closer look at what this means for the future of finance and the blockchain ecosystem.
21X: A New Era for Tokenized Securities
On December 3, 21X announced that it had successfully received a license to operate a blockchain-based trading and settlement system, regulated under European laws. This major milestone marks a new chapter for the firm, which has been working tirelessly to build out its platform in compliance with Europe’s rigorous financial regulations.
The license, granted by the German Federal Financial Supervisory Authority (BaFin), allows 21X to officially roll out its exchange for tokenized financial instruments from its headquarters in Frankfurt. The platform will offer a wide range of services, including tokenization, issuance, distribution, listing, and trading of tokenized assets.
“We’re not just getting a license; we’re making history,” said 21X CEO and founder Max Heinzle. “For the first time ever, both institutional and retail investors will be able to trade and settle tokenized securities on a fully regulated, blockchain-powered exchange. And we’ll do it with the same trust, security, and compliance that traditional markets provide.”
The EU’s DLT Pilot Regime: A Step Toward Regulated Blockchain Markets
This development is made possible by the European Union’s DLT (Distributed Ledger Technology) Pilot Regime, which was launched in March 2023 to encourage innovation in digital asset trading. The DLT Pilot Regime is a legal framework designed for trading and settlement of cryptocurrency assets that qualify as financial instruments under the EU’s MiFID II regulation.
The regime allows for the creation of new market infrastructures, such as DLT-based multilateral trading facilities (MTFs), DLT settlement systems, and trading platforms that can handle digital assets in a fully regulated environment. It’s the perfect stage for blockchain-based platforms like 21X to thrive, combining the power of decentralization with the safety and security of established financial regulations.
For 21X, it took about 18 months of work and close collaboration with BaFin, the German Federal Bank, and other EU regulators like the European Central Bank (ECB) and the European Securities and Markets Authority (ESMA) to obtain the green light. The time and effort spent in gaining approval demonstrates just how crucial it is for companies operating in the blockchain space to meet regulatory standards while also pushing forward innovation.
Strategic Partnerships: Building the Blockchain Backbone
To bring its vision to life, 21X has teamed up with some of the most influential players in the blockchain world. One of its key partners is Polygon, the Ethereum-linked blockchain network known for its scalability and security. Polygon’s infrastructure will enable 21X to execute trades and settle transactions securely and efficiently on the blockchain.
“Polygon’s proof-of-stake network is one of the most widely adopted blockchain protocols globally,” 21X said in a statement. “It’s cost-effective, fast, and offers robust security—making it the perfect foundation for a regulated trading platform.”
Additionally, 21X has partnered with the global financial services giant Apex Group and SBI Digital Markets, a subsidiary of Japan’s SBI Group, to help power the platform’s ecosystem. The firm has also joined forces with Chainlink, a leader in Web3 services, to bring real-world data onto the blockchain, further enhancing the platform’s capabilities for on-chain finance.
Through these strategic collaborations, 21X is ensuring that its platform not only meets the needs of today’s financial market but is also ready for the future of decentralized finance.
What’s Next for Blockchain and Tokenized Securities?
The success of 21X is just the beginning. As Europe’s blockchain regulations continue to evolve, more companies are likely to follow suit, applying for licenses under the DLT Pilot Regime to create their own tokenized trading platforms. The future of capital markets is rapidly shifting, and blockchain technology is at the forefront of this transformation.
Tokenized securities, which represent real-world assets such as stocks, bonds, and commodities, offer several advantages over traditional methods. These include increased liquidity, faster settlement times, and the ability to fractionalize high-value assets, allowing a wider pool of investors to participate in markets that were once inaccessible.
While 21X may be one of the first to secure a license under the DLT Pilot Regime, the space is growing quickly. The Czech Republic’s CSD Prague received similar approval in October, and other companies in Germany, the Netherlands, and beyond are already positioning themselves to create next-generation trading and settlement platforms.
A New Frontier for Finance
For 21X, securing this license isn’t just a technical achievement—it’s a momentous step toward revolutionizing the entire financial sector. As blockchain-based securities exchanges become more mainstream, the line between traditional and digital finance will blur, creating new opportunities for investors, businesses, and financial institutions alike.
The launch of 21X’s tokenization platform in early 2025 will be a defining moment in the evolution of capital markets. If successful, it could pave the way for the mass adoption of blockchain technology in mainstream finance, making digital assets as reliable, secure, and trusted as their traditional counterparts.
The future of finance is tokenized—and 21X is at the forefront of that revolution. Keep an eye on this trailblazing fintech as it prepares to shake up the way we think about and trade financial assets.
