FRANKFURT, 30 June 2025: 21X, the leading DLT-based exchange for tokenized financial instruments, today expressed strong approval for the European Securities and Markets Authority (ESMA)’s newly published Report on the Functioning and Review of the DLT Pilot Regime – Pursuant to Article 14 of Regulation (EU) 2022/858 (DLTR).1
The report aligns directly with 21X’s long-standing advocacy for a robust and adaptable regulatory framework to foster the growth of digital capital markets in the European Union. Its publication comes at a crucial juncture for the DLT Pilot Regime, which, despite acknowledging limited initial uptake and existing operational hurdles like a lack of interoperability with traditional systems and access to central bank money, is now witnessing growing interest from new applicants and market participants.
This momentum underscores the critical need for continued actions to enhance the regime’s attractiveness and functionality, addressing the very barriers identified by ESMA, and a sentiment that 21X has consistently championed, including in its recent commentary piece advocating on the subject2. Indeed, 21X has been at the forefront of driving these necessary changes, notably through:
- A joint position paper with CSD Prague, which provided clear and actionable proposals for essential amendments to the DLT Pilot Regime.
- A comprehensive response to the European Commission’s Targeted Consultation on the Integration of EU Capital Markets (SIU consultation), advocating for a more flexible, permanent, and commercially viable framework.
- Numerous direct engagements and bilateral dialogues with representatives of EU institutions, National Competent Authorities (NCAs), and key policymakers, actively contributing to the ongoing discussion which ESMA now states will lead to a reshaping of the regulatory landscape.
ESMA’s recommendations, proposed to the European Commission – and developed with input from National Competent Authorities (NCAs) and the European Central Bank (ECB) – include short-term and long-term measures to promote the EU market for tokenised financial instruments. Specifically, this means:
- Strategies to make the DLT Pilot Regime more appealing to the market, to encourage more financial market infrastructures to begin safely investing in DLT-based solutions by eliminating risk in being an early adopter.
- Proposed amendments to ensure the Pilot Regime becomes permanent, allowing for increased flexibility in regulatory thresholds and eligible assets, tailored to the risk profiles of different business models.
- Increasing the regulatory thresholds to allow DLT Market Infrastructures (DLT MI) to reach more customers, both to prove the economic viability of their investments, and to contribute greater liquidity and depth in markets for DLT financial instruments.
ESMA has also stated it wants to tackle regulatory arbitrage and ensure a level playing field in the DLT Pilot Regime. Furthermore, by allowing flexible rules based on risk instead of strict limits, DLT projects will be regulated according to their actual risks. This stops businesses from finding loopholes and ensures fair competition as tougher rules apply to riskier ventures, regardless of technology. The key is to implement these changes.Notably, the ESMA report explicitly highlights 21X AG as one of the three DLT-MIs formally authorized under the Pilot Regime since December 3, 2024, demonstrating its pioneering role and successful operationalization within this innovative framework. The report further details 21X AG’s successful execution of a DLT debt issue of €500 million, showcasing tangible results from the regime. Max J. Heinzle, CEO of 21X, stated:
‘We welcome ESMA’s proactive stance and their recommendation to adapt the DLT Pilot Regime to be a permanent and scalable regulation. This report not only validates the critical role of DLT in modernizing European capital markets but also perfectly aligns with the principles and enhancements 21X has consistently advocated.’
He added:
‘Now, the imperative is clear: ESMA must swiftly translate these recommendations into concrete, implemented changes. Only through decisive action will we unlock the full potential for digitalization and integration across EU financial markets.’
21X strongly believes that the proposed changes will enable a transformative development for European financial markets and a bold move to position Europe competitively with the US, which has also been taking significant strides to build a digital assets-friendly regulatory framework. In light of the European Commission’s recently communicated SIU strategy, which aims to enhance EU citizens’ wealth and bolster economic competitiveness, 21X firmly believes that the deeper digitalisation and integration of capital markets will play an increasingly pivotal role.
21X remains committed to working closely with regulators and market participants to contribute to the successful evolution of the DLT landscape, ensuring a secure, transparent, and efficient future for digital asset trading.
-end-
About 21X
21X is a Frankfurt-based financial institution at the forefront of revolutionizing capital markets through the use of blockchain technology. In December 2024, 21X secured a license to operate its groundbreaking distributed ledger technology (DLT) trading and settlement system (DLT TSS) trading venue, a milestone that places the company as a leader in the transition to digital finance. The company is ideally positioned to enable smart contract-based issuance, trading and settlement of tokenized stocks, bonds and funds. 21X’s exchange went live on 20th May with the launch of its primary market. It is set to launch its secondary market for peer-to-peer trading and settlement in the coming weeks, bringing the future of capital markets to life.
See the short explainer video on 21X and our blockchain-based exchange here
For more information on 21X, contact:
Richie MacTaggart, head of PR & marketing
Mail: press@21X.eu
Mob: +44 7828173419
Web: www.21x.eu/
LinkedIn: www.linkedin.com/company/21X/
