21.finance and fundsonchain collaborate in issuance and trading of tokenized fund units. With a net volume of 12 trillion euro for UCITS in Europe , as indicated by the European Fund and Asset Management Association (EFAMA), there is enormous potential for the tokenisation of fund units. Under the legal framework of the Regulation on Crypto Fund Units (Verordnung über Kryptofondsanteile – KryptoFAV) in Germany as well as the DLT Pilot Regime at European level, 21.finance and fundsonchain would like to contribute significantly to this tokenisation of fund shares with a joint offering.
The focus of the cooperation is the development of an integrated software and service solution for the distribution and trading of tokenised fund units. Within the project fundsonchain will conduct the tokenization, manage the DLT-based fund unit registry, settle transactions and provide reporting and tax services. 21.finance enables different distribution channels for tokenised fund units via the existing platform offering. In addition, 21.finance provides the market infrastructure for the secondary market within the EU DLT pilot regime with the European DLT Exchange – EDX, subject to licensing under the EU Regulation (DLTR 858/2022).
“We are convinced that due to the high efficiency gains resulting from disintermediation, issuance and trading of fund units will take place to large extent based on distributed ledger technologies. With the DLT Pilot Regime, the regulator has created a revolutionary legal framework which is harmonised across Europe, which we will now apply together with fundsonchain” – says Max Heinzle, founder and CEO of 21.finance AG.
“With direct access to the European DLT Exchange, we provide our clients with access to a regulated secondary market. This opens up a new digital distribution channel to end-customers for fund issuers across the EU. Fund units which have been tokenized and registered via fundsonchain can thus be traded directly without delay, and complex settlement processes lasting several days are significantly streamlined. Furthermore, in addition to the proven distribution processes, an innovative and digital fund distribution channel is created, which will sustainably increase the attractiveness of the product “fund” for younger customers as well.” – adds Volker Braunberger, Managing Director of fundsonchain.
The cooperation between 21.finance and fundsonchain will contribute significantly to the further development and strengthening of the market for tokenised fund shares. Both companies are confident that their combined strengths and expertise will drive the development of innovative solutions.
fundsonchain offers a comprehensive solution for the issuance and settlement of tokenised fund units in accordance with German legislation (including KryptoFAV) and the DLT Pilot Regime. In addition to issuing and tokenisation, the range of services also includes transaction processing and DLT-based management of the fund unit register. fundsonchain thus offers its customers an all-in-one solution for tokenised fund units with access to a regulated digital secondary market through EDX.
About 21finance AG
With its comprehensive software solution, 21.finance offers banks, financial intermediaries and asset managers the possibility to operate digital marketplaces for the distribution of financial products based on distributed ledger technology (DLT). With the European DLT Exchange (EDX), 21.finance is also developing a DLT-based exchange as a trading and settlement system (DLT TSS) for regulated financial instruments and funds in particular. For this, 21.finance has initiated the approval process through its subsidiary 21.finance DLT-TSS AG by submitting the licence application with the relevant regulatory authorities. This regulated DLT exchange will offer its participants the unique competitive advantage of a regulated secondary market for the securities issued on its marketplaces.
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