Introduction to SBI Digital Markets and 21X Partnership
SBI Digital Markets (SBIDM), a subsidiary of SBI Holdings—the largest online financial services group in Japan—has announced its collaboration with 21X, a German firm specializing in distributed ledger technology (DLT) market infrastructure. This partnership aims to facilitate the listing of tokenized securities on 21X’s innovative DLT market platform.
Tokenized Securities on a DLT Market
SBIDM plans to list tokenized securities on the DLT market operated by 21X, which utilizes a public permissionless blockchain for its trading and settlement systems. This technological framework aims to enhance transparency and efficiency in the trading of securities.
Licensing and Regulatory Oversight
21X is currently in the process of obtaining a license to operate a DLT trading and settlement system (DLT TSS) under the European Union’s new DLT regime (DLTR). Once granted, this license will enable 21X to function as a fully regulated DLT market operator within Europe, under the supervision of the European Securities and Markets Authority (ESMA).
SBIDM’s Role in the Venture
As part of this partnership, SBIDM will act as a listing agent and service provider, responsible for asset tokenization and the custody of tokenized securities on the 21X platform. The focus of their collaboration will be on the issuance and trading of exchange-traded notes (ETNs) and exchange-traded funds (ETFs) through 21X’s DLT infrastructure. SBIDM already has a robust presence in the Asia-Pacific region, which includes investors from countries such as Singapore, Japan, and Thailand. This venture provides an exciting opportunity for SBIDM to penetrate European markets.
Comments from Leadership
Max Heinzle, founder and CEO of 21X, expressed enthusiasm about the collaboration, stating, “Our strategic partnership with SBIDM marks a significant point in the development of 21X and the globalization of blockchain-leveraging capital markets.” He emphasized that SBIDM’s established foothold in Asia will allow the firm to utilize 21X as a gateway to Europe, thereby benefiting from the first fully regulated DLT exchange dedicated to tokenized securities.
The Rise of Tokenization in Financial Markets
The trend of asset tokenization has garnered increasing attention from traditional financial institutions. A recent report from Moody’s, a renowned investment risk assessment organization, highlights the remarkable growth in the value of tokenized funds. Beginning the year at approximately $100 million, the value has surged to around $800 million today, largely driven by the increasing tokenization of U.S. treasuries. This upward trend signifies a pivotal shift in how financial instruments are valued and traded, hinting at a more digital and accessible future for investors.