The German tokenized securities market has witnessed explosive recent growth, with the volume of issued tokenized securities increasing from €31 million to approximately €183 million in a year to the end of 2023 – and surging to €615 million in the second half of 2024 alone.
A new strategic partnership between 21X and Cashlink is aiming to leverage this momentum, extending the uptake of tokenized securities with the first blockchain-leveraging secondary market.
This collaboration will combine 21X’s trading venue with Cashlink’s tokenization and registry services, creating a seamless, regulatory-compliant ecosystem for tokenized securities in Germany.
21X is a Frankfurt-based fintech, developing a blockchain-powered exchange for tokenized assets, which will operate under the regulatory supervision of the European Union (EU).
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Smart contract issuance and settlement
With 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. 21X has submitted its license application to operate a DLT trading and settlement system (DLT TSS) and is expected to be one of the first companies authorized to operate under the EU DLT regime.
The new service will start on the public permissionless blockchain, Polygon PoS, the companies said today.
21X recently obtained the first license in Europe to operate its groundbreaking DLT exchange, positioning it as a leader in the transition to digital asset trading, while Cashlink holds the first crypto securities registrar license as well as a digital asset custody license from German regulator BaFin.
Jointly, 21X and Cashlink can offer services across the value chain for tokenized financial instruments in a fully regulated manner.
Max Heinzle, CEO of 21X, commented:
“Our partnership with Cashlink brings together two market leaders to unlock the full potential of tokenized securities, As the EU’s only fully regulated DLT exchange, 21X is the perfect platform for Cashlink customers looking to list their tokenized securities. Together, 21X and Cashlink are creating a powerful force that will drive unprecedented growth in digital asset trading and transform the capital markets landscape.”
The collaboration primarily focuses on the German market, where the regulatory framework – particularly the electronic securities act (eWpG) – has paved the way for the issuance and management of securities and fundshares via blockchain technology.
Since the introduction of eWpG, the market for electronic securities has experienced strong growth, with increasing participation from both domestic and international issuers.
Crypto custody services
In late 2024, Cashlink was authorized by BaFin to provide crypto custody services to offer the safeguarding of private cryptographic keys for clients in the field of tokenized securities. Earlier in the year, it was the first company in Germany to receive a license to manage a crypto securities register.
With the first DLT TSS license granted to 21X to operate a blockchain-based exchange and settlement system for tokenized assets, the collaboration between the two companies opens the possibility for on-chain trading, matching and settlement with natively tokenized financial instruments – marking a significant milestone and new levels of cost efficiency in the tokenization of capital markets.
Through this alliance, both parties can contribute to shaping the future of the German tokenized securities market, ensuring a scalable, compliant, and efficient foundation for its continued expansion.
