Crypto brokerage Bitpanda introduces blockchain platform to link European banks with tokenized assets.

The Vienna-based company is entering the expanding competition to develop compliant blockchain frameworks for traditional securities such as equities and funds.

Bitpanda CEO, Eric Demuth, at Consensus Hong Kong (CoinDesk)

What to know:

• Vienna-based cryptocurrency broker Bitpanda is introducing a blockchain to enable European banks and fintech companies to issue and settle tokenized assets in compliance with regulations such as MiCA and MiFID II.
• Vision Chain will utilize regulated euro-denominated stablecoins for transaction expenses and depend on Optimism’s Ethereum-based framework.
• This initiative positions Bitpanda within a larger competition among financial institutions, including Robinhood, Nasdaq, and the New York Stock Exchange, which are developing compliant blockchain solutions for the continuous trading of tokenized securities.

Vienna-based cryptocurrency broker Bitpanda is initiating a new blockchain network designed to integrate tokenized assets into Europe’s regulated financial landscape, as institutions aim for continuous market operations.

The firm announced on Wednesday that its “Vision Chain,” developed in collaboration with the Vision Web3 Foundation and Optimism OP$0.1126, will offer the necessary infrastructure for banks and fintechs to issue and settle tokenized assets in alignment with EU regulations such as MiCA and MiFID II.

The network employs compliant euro-denominated stablecoins for transaction fees to mitigate the volatility associated with standard cryptocurrency payments on public blockchains. It also relies on Optimism’s Ethereum-based infrastructure for settlement and scaling purposes.

This initiative occurs as firms across the global financial landscape delve deeper into tokenization to enhance market operations for continuous trading. The technology is widely regarded as a mechanism to optimize the issuance, trading, and recording of assets, reducing dependence on fragmented legacy systems. The potential market for tokenized assets could expand by 53% annually, reaching $18.9 trillion by 2033 across various asset classes, as estimated in a joint report by Boston Consulting Group and Ripple.

This initiative illustrates a broader competition among financial institutions. Competing digital broker Robinhood (HOOD) is currently experimenting with its proprietary blockchain known as Robinhood Chain, specifically designed for trading tokenized stocks and connecting to decentralized finance (DeFi) applications. Major Wall Street entities like Nasdaq and NYSE are also developing their blockchain platforms for tokenized securities, merging cryptocurrency infrastructure with the compliance and safeguards found in traditional systems.

Bitpanda’s chain aligns with the company’s overarching strategy to connect cryptocurrency infrastructure with traditional finance, providing banks and financial institutions with the blockchain tools necessary to offer digital asset services to their clients.

“Tokenization is anticipated to transform capital markets,” stated Lukas Enzersdorfer-Konrad, CEO of Bitpanda, in a statement. “European financial institutions have been prepared for this transition for years, but the required infrastructure has been lacking.”

“With Vision Chain, we are constructing a public blockchain tailored to Europe’s regulatory framework, merging the openness of public networks with the dependability that institutions demand,” he added.

Read more: Crypto broker Bitpanda bets on banks and tokenization to expand globally ahead of IPO plans