Revolutionizing the Digital Securities Market: SBI Digital Markets and 21X Collaboration
SBI Digital Markets (SBIDM), a subsidiary of Japan's prominent online financial services group, SBI Holdings, is making strides in the digital securities market. Teaming up with German firm 21X, a distributed ledger technology (DLT)-based market infrastructure provider, SBIDM is set to list tokenized securities on 21X's DLT market.
21X's DLT market boasts a trading and settlement system on a public permissionless blockchain, with plans to secure a license to operate a DLT trading and settlement system (DLT TSS) under the European Union's DLT regime (DLTR). This move positions 21X to become a regulated DLT market operator in Europe, under the watchful eye of the European Securities and Markets Authority (ESMA).
SBIDM's Role in the Partnership
As part of the collaboration, SBIDM will serve as a listing agent and service provider for asset tokenization, as well as handle the custody of tokenized securities on 21X's platform. The focus will primarily revolve around issuing and trading exchange-traded notes (ETNs) and exchange-traded funds (ETFs) on the DLT platform.
With a strong presence in the Asia-Pacific region, SBIDM sees this partnership as an opportunity to tap into European markets, bridging the gap between continents in the digital securities space. Max Heinzle, the founder and CEO of 21X, expressed enthusiasm about the partnership, highlighting the significance in the development of 21X and the globalization of blockchain-based capital markets.
He emphasized that SBIDM's foothold in Asia positions them to leverage 21X as a gateway to Europe, leveraging the first fully regulated DLT exchange for tokenized securities to facilitate cross-border transactions and market access.
The Tokenization Trend and its Implications
The emergence of tokenizing traditional assets has garnered attention from legacy financial institutions globally. Moody's, a leading investment risk assessment firm, reported a substantial increase in the value of tokenized funds, soaring from $100 million in early 2023 to approximately $800 million today.
This surge in value is predominantly fueled by the escalating tokenization of U.S. treasuries, indicating a growing appetite for digital securities and blockchain-based financial instruments among traditional investors. The trend underscores a shifting landscape in capital markets, with digital assets gaining traction and reshaping how securities are issued and traded.
As blockchain technology continues to revolutionize the financial ecosystem, collaborations like the one between SBIDM and 21X are poised to redefine the digital securities market. With a focus on regulatory compliance, innovation, and market expansion, this partnership sets the stage for enhanced liquidity, transparency, and accessibility in the tokenized securities space.
