21X Secures Historic EU License for Blockchain-Based Trading
The German financial regulator, popularly known as BaFin, has granted the first EU license to a broker to offer blockchain-based trading services to users.
About the Announcement
21X has achieved a historic first by becoming the first company to acquire an EU license for blockchain-based trading. Their trading system will be completely compliant with existing EU regulations. This development has the potential to revolutionize the global capital markets as we know it today.
The company has its headquarters in Frankfurt and plans on releasing its exchange for tokenized securities by the first half of 2025. By leveraging blockchain technology, the company will be able to host trading for both equity and debt securities. Further, they will also be able to facilitate the trade of real-world assets (RWAs) such as real estate or artwork. The only requirement would be for the asset to qualify as an eligible financial instrument.
The entire exchange will operate on a public and permissionless blockchain network.
Max Heinzle, CEO of 21X, underscored the significance of this milestone:
“This is more than just a license – it’s a revolutionary moment for capital markets. For the first time ever 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,” said Max Heinzle who is currently the CEO of 21X.
“The EU’s regulatory framework is the key to unlocking mass adoption of tokenized money and assets. It enables self-custody; it removes clearing and corresponding settlement risks; it eliminates unnecessary complexities by reducing intermediaries – all leading to widespread efficiency gains and significantly lower costs. With benefits such as these, 21X is not just building an exchange, we are building the market infrastructure for the future of capital markets on-chain.”
Impact on Industry
Adoption of Blockchain
As stated earlier, this license is the first of its kind that has been granted under a forward-looking rule implemented by the German BaFin. If 21X is successful in executing its goals, then it could mark a seismic shift in how global capital markets operate. It is likely that financial institutions from all around the world will be partnering with 21X to have their tokenized financial securities listed on the exchange.
Higher Efficiency
Blockchain promises to be more efficient than traditional methods of trading securities. As blockchain is public and permissionless, it may be able to provide a better environment for traders to conduct their activities. It is also likely that it will lead to a reduction in costs thanks to lower fees.
About 21X
21X is headquartered in Frankfurt as a financial technology company. The company’s primary focus is applying blockchain to solve challenges within the capital markets space. The company’s mission is to create a safer and more transparent trading environment.
Summing Up
This announcement could mark a watershed moment for the capital markets industry. If the promise of blockchain technology holds true, then it may shift the internal processes of the world’s financial markets.
