21X, in coordination with Polygon Labs, is pleased to announce 21X is building an ESMA regulated market infrastructure for tokenized securities on the Polygon proof-of-stake (PoS) blockchain. 21X and Polygon Labs are collaborating to advance asset tokenization and trading within the Polygon ecosystem.
Polygon PoS stands out as one of the most widely adopted protocols globally, boasting an extensive network that supports tens of thousands of decentralized applications (dApps). This remarkable success has gathered significant attention from prominent institutional entities worldwide. Key factors driving the appeal of the Polygon PoS protocol to traditional finance, major brands, and emerging Web3 startups include its cost-effective transaction fees, rapid transaction processing speeds, and robust security measures.
Tokenized financial instruments, such as stocks, bonds, or funds, bring the next wave of institutional adoption towards blockchain with profound implications for the financial industry. Asset tokenization enables fractional ownership of high-value assets, promotes accessibility to financial instruments, facilitates the tradability of illiquid assets, and automates processes such as reporting, interest payments, and corporate actions. Until now, the full potential of tokenized securities has been limited by regulatory uncertainty. However, with the introduction of the EU DLT Pilot Regime (DLTR), Europe has unveiled a harmonized regulatory framework that empowers the transformation of capital markets through disintermediation and decentralization. Asset Tokenization under DLTR disrupts the status quo and now finds its way to the Polygon PoS blockchain.
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21.finance will launch 21X, the first ESMA regulated blockchain-powered market infrastructure for financial instruments built on the Polygon PoS blockchain, to bring real financial use cases to the Polygon ecosystem. Thereby, access to financial assets can further be democratized and illiquid assets become tradeable on a public blockchain infrastructure. Currently, this initiative is undergoing regulatory assessment with national and international supervisors, facilitated by 21X, headquartered in Frankfurt, Germany. The to-be regulated market infrastructure 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 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 the transformative potential of 21X, stating, “21X is one of the most promising projects currently building on Polygon. Fully on-chain exchanges like 21X have a truly disruptive potential for nearly 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 you combine this with the Polygon protocols’ scalability and security, it’s clear the future holds countless innovative applications that will change the way we think about tokenized assets on a decentralized blockchain.”
With the Polygon PoS protocol being a preferred choice for institutional asset tokenization globally, 21X leverages a leading blockchain infrastructure for tokenized securities. The Polygon PoS-integrated trading venue will foster significant cost reductions in trading and settlement and can further act as a launchpad for primary issuances or even a future utility token by 21X.
The strategic collaboration between Polygon and 21X also encompasses collaboration with various financial institutions and service providers within the Polygon ecosystem. This includes players in the fields of blockchain analytics, e-money institutes, market makers, and oracle services. Max J. Heinzle, CEO, and founder of 21.finance, highlighted the collaborative 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.”
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