Licensed Tokenization Platform to Launch in Germany in 2025

German FinTech company 21X obtained a European license to operate the first fully regulated blockchain-based trading platform.

21X received approval from Germany’s Federal Financial Supervisory Authority (BaFin) to operate a blockchain system for trading and settlement. Leveraging this regulatory approval, the company plans to launch an exchange for tokenized financial instruments in Q1 2025.

The press release notes that the license was issued under the EU’s DLT Pilot Regime (DLTR), designed to test and implement trading and settlement systems based on distributed ledger technology. In addition to BaFin, the application process involved the European Securities and Markets Authority (ESMA), the European Central Bank (ECB), and the Deutsche Bundesbank. The application review took 18 months to complete.

The project’s technical partners include Polygon Labs, Apex Group, and SBI Digital Markets. The 21X platform will offer tokenization services, issuance, distribution, listing, and trading of tokenized assets.

Max Heinzle, CEO of 21X, highlighted that the launch would allow institutional and retail investors to trade and settle tokenized securities on a fully regulated blockchain-based exchange with the same level of trust, security, and compliance as traditional markets.

The use of tokenization is becoming a notable trend in financial technology. In November 2024, tokenized U.S. T-bills were first introduced within the Bitcoin ecosystem. Around the same time, the U.S. Commodity Futures Trading Commission (CFTC) approved tokenization for collateral management in derivatives markets.