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

German fintech company 21X has received regulatory approval to launch a tokenization platform, becoming one of the first firms authorized to operate blockchain-based trading infrastructure.

The approval was granted under the European Union’s DLT Pilot Regime, according to a Tuesday press release.

The announcement came following the issuance of a license by Germany’s financial supervisory authority, Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin).

21X Can Offer Regulated Blockchain Trading

The license allows 21X to establish a fully regulated blockchain trading and settlement system from its Frankfurt headquarters.

The platform is set to offer a range of services, including tokenization, issuance, distribution, listing, and trading of tokenized financial instruments.

The company plans to officially launch in the first quarter of 2025.

The EU’s DLT Pilot Regime, implemented in March 2023, provides a legal framework for trading and settlement of crypto assets that qualify as financial instruments under the Markets in Financial Instruments Directive and Regulation (MiFID II).

This framework facilitates the creation of new market infrastructures, such as DLT multilateral trading facilities and DLT trading and settlement systems.

By securing its license, 21X joins an exclusive group of firms shaping the future of blockchain-based finance in Europe.

Obtaining the license was a rigorous process for 21X, requiring 18 months of collaboration with BaFin, the German Federal Bank, the European Securities and Markets Authority (ESMA), and the European Central Bank (ECB).

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

“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.”

To develop its blockchain-based trading platform, 21X has partnered with several key players, including Polygon, Apex Group, and SBI Digital Markets.

Polygon, a widely used Ethereum-linked blockchain network, is central to the platform’s design.

The company cited Polygon’s cost-effective transaction fees, rapid processing speeds, and robust security measures as critical factors for its adoption.

According to 21X, the collaboration with Polygon Labs leverages the network’s scalability and security to facilitate onchain trades and settlements.

21X Partners with Chainlink

In addition to its work with Polygon, 21X recently announced a strategic partnership with Chainlink, a Web3 services platform.

Chainlink’s technology will be integrated as a standard for onchain finance, further enhancing the platform’s capabilities.

We're excited to announce Europe’s first tokenized securities trading & settlement system—21X (@tradeon21x)—is adopting the #Chainlink standard.

Price Feeds will underpin 21X’s trading engine & CCIP will connect it to assets across the onchain economy: https://t.co/ACGrBKuduL pic.twitter.com/BYKSBGUFp8

— Chainlink (@chainlink) December 2, 2024

21X’s regulatory approval underscores a growing trend of integrating blockchain technology into traditional finance.

The European Securities and Markets Authority (ESMA) has identified 21X as one of at least four applicants under the EU’s DLT Pilot Regime.

Other notable developments include the Czech Republic’s CSD Prague receiving permission to operate under the regime in October 2023.