ABN AMRO and 21X Complete Tokenized Securities Trading Trial

Highlights:

• ABN AMRO and 21X tested tokenized securities trading using stablecoins on a blockchain-based platform.
• The EU’s DLT Pilot Regime allows platforms to handle both trading and settlement without a central securities depository.
• ABN AMRO will provide custody services and expand access to tokenized assets on the 21X platform.

The third largest bank in the Netherlands, ABN AMRO, has successfully conducted an on-the-block trading trial with 21X, a Frankfurt-based digital asset exchange. 21X announced that the trial involved listing a tokenized asset on its on-chain market.

ABN AMRO TESTS ON-CHAIN TRADING

Netherlands’ third-largest bank ABN AMRO just ran an on-chain trading trial with 21X—testing tokenized securities using stablecoins.

The bank issued an ERC-3643 token on the Polygon Amoy Testnet, while 21X matched it with an ERC-20 E-Money… pic.twitter.com/ZhvX1RpReb

— IBC Group Official (@ibcgroupio) January 30, 2025

ABN Amro issued an ERC-3643 token on the Polygon Amoy Testnet. 21X paired it with an ERC-20 based E-Money Token though the asset name was not disclosed. The bank has already long been involved in digital assets and earlier issued tokenized green bonds.

Following this pilot project, it plans to expand its reach to include secondary market capabilities. This is part of a larger plan to integrate digital asset trading into traditional finance.

The EU granted 21X a regulated trading license in December 2024. The company plans to launch its exchange, but it has not given a clear timeline for the move. The trial with ABN AMRO is a first step toward making tokenized securities more accessible.

Impact of Blockchain and the DLT Pilot Regime on Securities Trading

Traditional securities trading is based on different execution and settlement infrastructure. In addition, secondary trading needs to occur through a central securities depository (CSD) that meets European regulations. Nevertheless, the EU’s DLT Pilot Regime permits some platforms to undertake both trading and settlement. This gives legal exceptions from the requirement of the CSD.

The ERC-3643 token used was developed by Tokeny and listed on the 21X platform. The onchain order book automatically matched buy and sell orders. The system used an E-Money Token, a stablecoin that complies with EU regulations, for instant settlement. Instant settlement of trades cuts down on the risks associated with delayed transactions.

Public blockchains employ automated market makers (AMMs) for trading, which may be unsuitable for illiquid tokens. Blockchain helps to reduce costs and increase trading efficiency in securities trading. The process results in trades that are executed without intermediaries, hence enabling easy facilitation of the entire process.

Stablecoins play a growing role in digital trading. 21X has recently partnered with AllUnity, a stablecoin initiative supported by Deutsche Bank asset manager DWS. The platform aims to execute trades using stablecoins instead of fiat currencies, aligning with this collaboration. With this approach, trades would instantly settle as soon as they are matched.

🚀 Excited to partner with 21X to launch our pending EUR-denominated stablecoin on their upcoming trading platform! Together, we will be empowering the global trading community with secure & inclusive financial solutions. Learn more: https://t.co/pWjxf655mg pic.twitter.com/xYKweGYL9q

— AllUnity (@AllUnityStable) January 24, 2025

Next Steps and Future Prospects

For the trial, ABN AMRO used its institutional wallet solution, which it intends to eventually support as a provider of custody services. Once the 21X platform becomes fully operational, the bank hopes to make the platform available.

The two companies will continue to collaborate to further develop the trading system. The collaboration will integrate tokenized assets into the secondary market. This proof of concept strengthens confidence in the use of blockchain in the trading of securities.

The next step of 21X is onboarding institutional participants for its official launch. The involvement of ABN AMRO shows institutional interest in blockchain based financial solutions.