German fintech firm 21X received regulatory approval from the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), Germany’s financial supervisory authority, to launch a blockchain-based tokenization platform.
The license permits 21X to operate a trading and settlement system for tokenized financial instruments, regulated by European laws.
The platform, which is set to launch in the first quarter of 2025, will offer services including tokenization, issuance, distribution, listing, and trading. It will be based in Frankfurt, with a focus on providing a fully regulated, blockchain-powered exchange for both institutional and retail investors.
21X’s approval comes under the European Union’s Distributed Ledger Technology (DLT) Pilot Regime, a framework that regulates the trading and settlement of cryptocurrency assets that qualify as financial instruments under the MiFID II regulations. The regime, which took effect in March 2023, seeks to support the development of new types of market infrastructures, including DLT multilateral trading facilities and settlement systems.
21X has collaborated with several partners, including Polygon and Chainlink, to build its platform. Polygon’s proof-of-stake blockchain network will enable efficient trade execution and settlement, while Chainlink will provide onchain finance services.
To encourage regulated business within the crypto industry, Germany adopts a licensing scheme for digital assets services after the amendment it introduced two years ago to the EU’s Money Laundering Directive.
Any business wishing to offer cryptocurrency services in Germany must first seek approval from the Federal Financial Supervisory Authority, also known as BaFin. US popular exchange Coinbase was the first crypto native startup to be approved by the BaFin in 2021, followed by the Berlin-based financial technology firm Upvest.
Meanwhile, the introduction of MiCA provides a unified regulatory framework for cryptocurrencies and digital assets across EU member states, potentially complicating the approval process for Binance and other crypto-related entities operating in the region.
The German government may have lost up to $1.6 billion in profits after selling 50,000 Bitcoin in July, just months before a massive rally following Donald Trump’s recent U.S. election victory.
Germany’s sale of Bitcoin seized from the defunct piracy site Movie2K brought in about $2.88 billion at an average price of $57,600 per coin. With Bitcoin recently hitting record highs, that 50,000 BTC would now be worth around $4.5 billion — a 56% increase.
Content retrieved from: https://financefeeds.com/21x-secures-bafin-approval-for-blockchain-tokenization-platform/.
