21X and Polygon Labs to Build ESMA Regulated Market Infrastructure for Tokenized Securities
21X, in partnership with Polygon Labs, has announced its endeavor to construct an ESMA regulated market infrastructure for tokenized securities on the Polygon proof-of-stake (PoS) blockchain. This strategic collaboration between 21X and Polygon Labs aims to revolutionize asset tokenization and trading within the Polygon ecosystem, leveraging the advanced capabilities of the Polygon PoS protocol.
Polygon PoS stands as one of the world’s most widely adopted protocols, offering a robust network that supports tens of thousands of decentralized applications (dApps). Its appeal to traditional finance, major brands, and emerging Web3 startups lies in its cost-effective transaction fees, rapid transaction processing speeds, and stringent security measures.
The initiative to tokenize financial instruments like stocks, bonds, and funds signifies a significant step toward institutional adoption of blockchain technology. Asset tokenization facilitates fractional ownership of high-value assets, increases accessibility to financial instruments, enables the tradability of illiquid assets, and automates processes such as reporting, interest payments, and corporate actions. Regulatory uncertainties have previously limited the potential of tokenized securities. However, the introduction of the EU DLT Pilot Regime (DLTR) has ushered in a harmonized regulatory framework in Europe, empowering the transformation of capital markets through decentralization and disintermediation.
In this landscape, 21.finance is set to launch 21X, the first ESMA regulated blockchain-powered market infrastructure for financial instruments on the Polygon PoS blockchain. This move aims to democratize access to financial assets and make illiquid assets tradeable on a public blockchain infrastructure. Currently undergoing regulatory assessment with national and international supervisors, 21X will enable smart contract-based trading and settlement of tokenized stocks, bonds, and fund instruments. The order books of 21X, operating on the Polygon PoS protocol, are designed to unlock the full potential of blockchain technology by promoting disintermediation and decentralization in capital markets.
Colin Butler, Global Head of Institutional Capital at Polygon Labs, expressed confidence in 21X, stating, “21X is one of the most promising projects building on Polygon. Fully on-chain exchanges like 21X have disruptive potential for every sector in traditional finance. 21X’s approach, working directly with regulators to build a fully compliant securities trading venue, changes the game in terms of what’s possible. When combined with the Polygon protocols’ scalability and security, innovative applications that revolutionize tokenized assets on a decentralized blockchain become a reality.”
As the preferred choice for institutional asset tokenization globally, the Polygon PoS protocol provides a robust blockchain infrastructure for tokenized securities. The integration of 21X with the Polygon PoS protocol promises significant cost reductions in trading and settlement and can potentially serve as a launchpad for primary issuances or future utility tokens by 21X.
Max J. Heinzle, CEO, and founder of 21.finance, emphasized the collaborative nature of the effort, saying, “With the technical expertise of the Polygon Labs team and the vibrant Polygon ecosystem in asset tokenization, we will enable tradability and liquidity for tokenized securities and foster institutional adoption of the Polygon protocols.”
This collaboration not only signifies a significant advancement in the tokenization landscape but also underlines the transformative potential of blockchain technology in reshaping the future of financial markets.
About 21X
21X, in coordination with Polygon Labs, is building an ESMA regulated market infrastructure for tokenized securities on the Polygon proof-of-stake (PoS) blockchain. The collaboration aims to revolutionize asset tokenization and trading within the Polygon ecosystem, leveraging the advanced capabilities of the Polygon PoS protocol.
About Polygon Labs
Polygon Labs provides cutting-edge solutions in the blockchain space, with a focus on enhancing the capabilities and applications of the Polygon PoS protocol. Their collaboration with 21X aims to disrupt the traditional finance sector by enabling fully compliant securities trading on the Polygon blockchain.
Photo by Oliver Schwendener on Unsplash
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