Institutional integration of DLT-based market infrastructure

The partnership between d-fine and 21X marks an important milestone in the implementation of the vision of a more integrated, efficient and innovative European capital market.

As strategic partners, we address a critical need in the digital financial services sector: providing expert advice for the seamless integration of 21X's DLT-based platform into the issuance, trading and settlement processes of institutional clients.

21X is the first licensed trading and settlement system for tokenised financial instruments that uses distributed ledger technology (DLT) under the EU DLT pilot regime. As a DLT trading and settlement system (TSS), 21X connects trading and settlement processes to enable efficient and secure settlement of assets.

The most important regulatory developments at a glance:

• The Electronic Securities Act (eWpG) laid the foundation for DLT-based ‘crypto securities’ back in 2021, which are, however, excluded from traditional stock exchange trading and are therefore dependent on a DLT-based trading venue.
   
• The Markets in Crypto Assets Regulation (MiCAR) also established the regulatory framework in 2024 to bring e-money tokens (aka ‘stablecoins’) to the blockchain.
   
• With the DLT pilot regime that came into force in 2023, the necessary DLT-based market infrastructure has now been created in the form of trading venues (MTFs) and settlement systems (SSs) where DLT-based securities and e-money come together. If a company offers both functionalities in combination, this creates a DLT trading and settlement system (TSS).

Further details regarding the strategic partnership between d-fine and 21X, as well as their DLT pilot regime licence, can be found on the website of 21X.

If you would like to learn more about the potential of DLT in institutional applications, please contact us directly.