Hamburg, December 5, 2024 – YPOG successfully advised the Frankfurt-based fintech company 21X on obtaining the first license for a trading and settlement system issued under the EU’s DLT Pilot Regime (DLTR). Over a period of two years, YPOG’s advice covered the entire process from the preparation of the application to the final granting of the license.
The EU pilot regime came into force in March 2023 and provides a legal sandbox for market infrastructures based on distributed ledger technology (DLT). It allows temporary exemptions from certain regulatory requirements to develop innovative solutions for the trading and settlement of DLT financial instruments.
21X is the first company in Europe to receive a license for a DLT-TSS (Trading and Settlement System). This enables the fintech to offer issuers of specific financial instruments that are issued on a DLT basis both trading on a multilateral trading facility (DLT-MTF) and settlement (DLT-SS) from a single source. To date, there has been a strict separation between trading and settlement, which is carried out by central securities depositories (CSDs).
Blockchain technology, in this case in use through the Polygon blockchain network, offers fast and secure processing of securities transactions due to the immutability of the data registered on the blockchain. The technology accelerates capital market transactions significantly. The settlement time is reduced from T+2 to T+0, so that transactions are completed almost immediately. This has many advantages, particularly for the collateral business.
Team
Dr. Carola Rathke (Co-Lead, Financial Services, Fintech + DLT), Partner, Hamburg
Dr. Anika Patz (Co-Lead, Financial Services, Fintech + DLT), Associated Partner, Berlin
Dr. David John (Financial Services, Fintech + DLT), Senior Associate, Hamburg
About 21X
21X is a Frankfurt-based fintech at the forefront of revolutionizing capital markets through the use of blockchain technology. As the first fully regulated digital exchange licensed under the European Union's distributed ledger technology (DLT) regulatory framework, 21X is paving the way for the institutional adoption of tokenized securities.
21X is ideally positioned to enable smart contract-based issuance, trading and settlement of tokenized stocks, bonds and funds, offering unparalleled transparency, efficiency, and security.
In December 2024, 21X secured its license to operate its groundbreaking DLT trading and settlement system (DLT TSS) trading venue, a milestone that positions the company as a leader in the transition to digital finance. 21X exchange is set to launch in the spring of 2025, bringing the future of capital markets to life.
See the short explainer video on 21X and our blockchain-based exchange here.
