21X was the first company in Europe to receive authorization to run a combined digital securities trading and settlement venue without a central securities depository (CSD). Amongst its 18 EU regulatory exemptions, it also has permission to enable consumers to use the platform directly although it’s not yet using that. Now it plans to replicate this model in the United States.
Current regulations in most countries require the trading of securities to be separated from their settlement, and the need to use a CSD. Tokenized securities are often regulated in the same way. That’s not ideal for DLT based trading which allows for atomic settlement. Europe introduced the DLT Pilot Regime to allow for exemptions from some of these requirements.
21X has held numerous meetings with the Securities and Exchange Commission (SEC) and its Crypto Task Force, including in August when they met with around 30 SEC staff.
“We found a route to copy (and) paste what we’ve done in Europe and deploy it in the US,” 21X CEO Max Heinzle told Ledger Insights. The path is based on current US legislation combined with exemptive relief, although at this stage he was reluctant to share exactly which licenses and exemptions. Under Europe’s DLT Pilot Regime, 21X landed a single DLT trading and settlement system (TSS) license, whereas in the United States it is applying for multiple licenses.
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