Funds On Chain and 21.finance join forces to make tokenized fund units tradeable
4 August 2023
Funds On Chain and 21.finance are cooperating on the issuance and trading of tokenized fund units. Their aim is to develop an integrated software and service solution for the distribution and trading of such fund units.
The fintech firm 21.finance AG, based in Ruggell in Liechtenstein, is joining forces with Funds On Chain GmbH from the German city of Saarbrücken, further details of which can be found in a press release. The companies intend to develop an integrated software and service solution for the sale and trading of tokenized fund units. Funds On Chain will be responsible for managing tokenization aspects in addition to handling the DLT-based fund unit register, processing transactions, and providing reporting and tax services. For its part, 21.finance will facilitate various sales channels for tokenized fund units via the existing platform offering. Furthermore, 21.finance now also provides the market infrastructure for the secondary market with the European DLT Exchange - EDX.
With a net volume of 12 trillion euros for UCITS (Undertaking for collective investment in transferable securities in Europe), there is enormous potential for the tokenization of fund units, as indicated by the European Fund and Asset Management Association (EFAMA), which is based in Brussels.
Due to the high efficiency gains resulting from disintermediation, Max Heinzle, founder and CEO of 21.finance AG, expects that “issuance and trading of fund units will take place to large extent based on distributed ledger technologies”. This term, often abbreviated to DLT, describes digital, decentralized systems to record and monitor transactions.
“With direct access to the European DLT Exchange, we provide our clients with access to a regulated secondary market”, comments Volker Braunberger, Managing Director of Funds On Chain, in the press release.