Assetera Launches MiFID-Compliant API, Connecting Tokenized Securities to Crypto Exchanges

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Archyde staff Writer

Austrian Trading Platform Assetera Unveils API for Tokenized Securities, Simplifying EU Market Access for Crypto Exchanges
2024-02-20

Assetera, a regulated trading platform based in Austria, has launched an innovative API. This new tool allows cryptocurrency exchanges to offer tokenized financial products, such as stocks and government bonds, without the need for thier own MiFID license.

The API aims to address a significant gap in the European market.Strict financial regulations have historically made it challenging for crypto platforms to support tokenized securities. Assetera’s solution enables exchanges to seamlessly integrate these offerings.

Through this API, exchanges can now provide access to tokenized assets while Assetera manages all necessary compliance. This includes crucial know-yoru-customer (KYC) and anti-money laundering (AML) checks.

At its launch, the API supports over 60 tokenized securities. These include U.S. Treasury bonds, blue-chip equities, and Exchange Traded Funds (ETFs). It is also compatible with tokens issued by providers like Backed Finance.

These tokenized offerings are legally compliant across all 30 EU and EEA countries. Assetera ensures this compliance through its existing licenses.

This progress marks a pivotal moment in the adoption of tokenized securities. Following Backed Finance’s recent declaration of xStocks, featuring over 55 tokenized stocks and ETFs on Kraken, the demand for exchanges to offer these products is surging.

“This effectively smashes the two-tier system that’s allowed only the largest players to fast-track tokenized stock listings in Europe,” a company representative stated via email.”With Assetera, any exchange can now legally launch tokenized securities in weeks instead of years.”

Assetera will handle all compliance, custody, and settlement processes on the back end. This simplifies the process dramatically for participating exchanges.

The company is currently in discussions with several top-20 global crypto exchanges. Assetera anticipates facilitating up to 1 billion euros ($1.1 billion) in trading volume within its first year of operation.

Such significant scale could position tokenized securities as a mainstream investment option within the European cryptocurrency landscape.

The rise of Tokenized Securities in Europe

The integration of tokenized securities onto crypto platforms signifies a major shift in digital finance. These digital tokens represent ownership of real-world assets, making them accessible and tradable on blockchain technology.

Europe’s stringent regulatory surroundings has, until now, presented a hurdle for broader adoption. Assetera’s API provides a compliant pathway, democratizing access to these refined financial instruments for a wider range of crypto businesses.

Frequently Asked Questions About Assetera’s API

What is Assetera’s new API designed to do?

Assetera’s new API allows cryptocurrency exchanges to offer tokenized financial products like stocks and government bonds without needing their own MiFID license.

How does Assetera’s API simplify market access for crypto exchanges?

It enables exchanges to integrate tokenized securities directly onto their platforms while Assetera handles all compliance, KYC, and AML checks.

What types of tokenized securities can be offered through the API?

The API supports over 60 tokenized securities at launch, including U.S. Treasury bonds, blue-chip equities, and ETFs.

Is Assetera’s API compliant across the European Union?

yes, the offerings are legally compliant across all 30 EU and EEA countries under Assetera’s existing licenses.

How long does it typically take for an exchange to launch tokenized securities with assetera?

Exchanges can legally launch tokenized securities in weeks, a significant reduction from the years it might otherwise take.

What is the expected trading volume for Assetera in its first year?

Assetera expects up to 1 billion euros ($1.1 billion) in trading volume in its first year.

What are your thoughts on this groundbreaking development in the european crypto market? Share your insights and join the conversation in the comments below!

How does Assetera’s MiFID compliance specifically address the concerns of institutional investors regarding participation in digital asset markets?

bridging the Gap: Tokenized Assets and Customary Finance

Assetera has announced the launch of its MiFID (Markets in Financial Instruments Directive) compliant Request Programming Interface (API), a significant step towards integrating tokenized securities with mainstream cryptocurrency exchanges. This development addresses a critical hurdle in the broader adoption of digital asset investing – regulatory compliance and interoperability between traditional financial systems and the burgeoning DeFi (Decentralized Finance) landscape. The API aims to streamline the process of listing and trading tokenized stocks, tokenized bonds, and other real-world assets (RWAs) on crypto platforms.

Understanding the MiFID Compliance Advantage

MiFID II, a European regulation, sets high standards for investor protection and market transparency. Assetera’s commitment to MiFID compliance is paramount. It signifies that the API facilitates trading activities adhering to stringent regulatory requirements, including:

Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols.

Best Execution requirements, ensuring clients receive the most favorable trading terms.

Robust risk management frameworks.

Obvious trade reporting mechanisms.

This compliance is crucial for attracting institutional investors and fostering wider acceptance of digital securities. Without it, many traditional finance participants are legally restricted from engaging with tokenized markets. The API effectively acts as a regulatory bridge, enabling compliant access to tokenized investment opportunities.

How the Assetera API works: A Technical Overview

The Assetera API functions as a middleware solution, translating data and protocols between traditional financial infrastructure and blockchain networks. Key features include:

1. Secure Data Feeds: Real-time price data and market data for tokenized securities are securely transmitted to connected exchanges.
2. Order Management System (OMS) Integration: Seamless integration with existing OMS platforms used by crypto exchanges.
3. Compliance Engine: Automated checks for regulatory compliance, including trade surveillance and reporting.
4. Wallet Connectivity: Secure and reliable connection to digital wallets for custody and settlement of tokenized assets.
5. API Documentation & Support: Extensive documentation and dedicated support for developers integrating the API.

The API supports popular blockchain networks like Ethereum,Polygon,and potentially others,offering flexibility for exchange partners. It utilizes industry-standard security protocols to protect sensitive data and prevent unauthorized access. Blockchain interoperability is a core design principle.

Benefits for Crypto Exchanges

Integrating the Assetera API offers several key advantages for cryptocurrency exchanges:

expanded Asset Listings: Access to a wider range of investment products, including tokenized ETFs, tokenized real estate, and fractionalized NFTs.

Increased Trading Volume: Attract new users and trading activity from both traditional finance and the crypto space.

Enhanced Regulatory Standing: Demonstrate a commitment to compliance and attract institutional investors.

Competitive Advantage: Differentiate themselves from competitors by offering access to regulated tokenized securities.

New Revenue Streams: Generate revenue through listing fees, trading commissions, and other services.

This allows exchanges to move beyond purely cryptocurrency trading and offer a more diversified portfolio of investment options.

Real-World Applications & Potential Use Cases

The potential applications of this API are vast. Consider these examples:

Tokenized Treasury Bills: Exchanges could list tokenized versions of government treasury bills, offering investors access to low-risk, fixed-income opportunities.

Fractional Ownership of Fine Art: Tokenizing high-value assets like artwork allows for fractional ownership, making them accessible to a broader range of investors.

Tokenized Private Equity: Bringing private equity investments onto the blockchain increases liquidity and transparency.

Cross-Border Investment: Facilitating seamless cross-border investment in tokenized securities, reducing friction and costs.

The Future of Tokenization and Regulatory APIs

Assetera’s launch is indicative of a broader trend towards the convergence of traditional finance and the digital asset space. Expect to see more companies developing similar regulatory technology (RegTech) solutions to facilitate the adoption of tokenized securities. Key areas of future development include:

Improved Scalability: Handling increasing volumes of transactions as tokenized markets grow.

Enhanced Security: Protecting against evolving cyber threats.

Standardization: Developing industry-wide standards for tokenization and compliance.

* Integration with central Bank Digital Currencies (CBDCs): Exploring the potential of CBDCs to streamline settlement and reduce counterparty risk.

The success of initiatives like Assetera’s API will be crucial in unlocking the full potential of digital asset markets and creating a more inclusive and efficient financial system. Security token offerings (STOs) are expected to gain traction as regulatory clarity increases.