New blockchains emerge and launch all the time. Most of them also dip into the DeFi space. In this case, Aleph Zero is the new blockchain, and EDX is the new DeFi exchange. EDX is special because it’s a regulated exchange. The devs are building this under the new EU DLT Pilot Regime.
So, let’s have a look at what the EDX exchange on Aleph Zero is all about.
Meet EDX by @21financeAG.
It's one of the first exchanges for tokenized securities, bonds, and funds that is being developed under the new EU DLT Pilot Regime.
Here's how EDX will use the Aleph Zero blockchain.👇 pic.twitter.com/NZNg8x4oxx
— Aleph Zero (@Aleph__Zero) April 14, 2023
What Is EDX?
21.finance AG is the firm behind EDX. EDX stands for European DLT Exchange. To further clarify, DLT means Distributed Ledger Technology. The team’s headquarters is in Frankfurt am Main, Germany. They work together with the Aleph Zero Foundation and Cardinal Cryptography. The Cardinal Cryptography team is the core developer of the Aleph Zero technology.
EDX is a securities exchange on Aleph Zero. In all fairness, there are plenty of such exchanges. So, what makes EDX stand out? Well, we mentioned that already in the intro. It’s under development of the new EU DLT Pilot Regime. This makes it one of the very first exchanges that will operate under this regime.
EDX and Aleph Zero’s cooperation has two objectives.
- Build EDX on Aleph Zero. This allows both to explore the capabilities of the network. However, in a regulatory-driven market. The exchange also has many privacy features. It can boost them across a variety of networks.
- They can deploy a regulatory-driven token standard to the Aleph Zero ecosystem. This will stimulate a regulated DeFi ecosystem within the network.
Besides deploying on Aleph Zero, they will also deploy on Polygon. Francesco Adiliberti is at the helm of EDX. He was a managing director at, for instance, Goldman Sachs International, Amber Group, and HSBC.
In essence, EDX can offer securities legally through blockchain technology. This is an important step towards finding a good balance between regulation and DeFi. Aleph Zero is in the driver’s seat to test out these waters by onboarding EDX. The picture below shows EDX’s website.
Source: EDX website
What Is the EU DLT Pilot Program?
The DLT Pilot Program started on March 23, 2023. When the EU set up legislation for financial services, they didn’t include DLT. However, nowadays, DLTs take part in financial services. They are issuing, trading, and settling in said services. The DLT Pilot Regime looks to solve this lack of regulation. They can grant temporary exemptions for up to six years.
The exemptions are from existing financial requirements and legislation in the EU. In other words, you can use DLT without disobeying current legislation. You can see it as a sandbox in which you can test products and projects. However, it all happens in a controlled environment.
EDX will offer, for example, tokenization for stocks, bonds, and funds. Now, there’s no doubt about them being securities. In sharp contrast to what is happening in the United States with the SEC. They rather seem to demonize crypto and declare almost everything as a security. Rather than offering solutions and cooperating with crypto projects to find said solutions. It’s a relief to see such a proactive stance from the financial EU governing bodies.
DLT-based trading and settlement system licenses are under the jurisdiction of BaFin and ESMA.
- BaFin is a German autonomous public-law institution. It is subject to the legal and technical oversight of the Federal Ministry of Finance. They’re based in Bonn and Frankfurt am Main.
- ESMA is the European Securities and Market Agency based in Paris, France. It is the EU’s financial markets regulator and supervisor.
EDX filed with both of them.
EDX is one of the pioneers in the space, and the core team of Aleph Zero is excited to have the opportunity to collaborate on an enterprise-grade solution in the EU market.
Learn more below.https://t.co/Hea5KLjEBY
— Aleph Zero (@Aleph__Zero) April 14, 2023
We looked at EDX, one of the first exchanges that’s being built under the EU DLT Pilot Regime. They are building on Aleph Zero, which offers extra privacy functions. It’s good to see that the EU is working on legislation and looking for solutions. This is a step in the right direction for blockchain technology and the crypto space.
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