Dusk, a prominent Decentralized Ledger Technology (DLT) solutions provider with a market capitalization of €120 million, and NPEX, a Netherlands-based stock exchange, announced their partnership to establish Europe’s first fully regulated security exchange for digital assets according to a recent press release.
According to the release, Dusk and NPEX’s solution leverages blockchain technology to create a secure, transparent and efficient exchange for security tokens, which are tokenized securities such as stocks or exchange-traded funds.
NPEX is known for its innovative approach in the European financial sector and has a community of 15,000 engaged investors. The company has successfully facilitated 97 financings in small to medium-sized enterprises, raising over €185 million.
Conversely, Dusk facilitates easy access to funding, trade and automation by integrating smart contracts, transforming conventional procedures. The platform provides institutions with immediate clearing and settlement, automated compliance, low liquidity fragmentation and improved operational efficiency.
The long-term strategic collaboration between the two companies involves a commitment to lead the development of new features customized to meet the changing demands of NPEX and its customers, ensuring that the exchange stays innovative in the financial services industry.
The news comes close to four years after CoinDesk reported about Dusk Network’s acquisition of up to 10% in stock holdings from NPEX. At the time, Dusk was also said to be involved in another partnership with Netherlands-based company Firm24, which included plans to tokenize equity for thousands of Dutch companies.
After several years of planning, the new exchange is now set to lead the next stage of securities tokenization in Europe. Among various improvements compared to traditional exchanges, it is expected to enhance efficiency for investors and companies seeking substantial funding. This includes instant clearing and settlement, automated corporate actions like dividend payouts, voting and coupon payments, as well as the implementation of processes to enhance operational efficiency.
Furthermore, fractionalization and smart contracts allow investors to easily participate in voting and claim dividends independent of their investment size. This decreases obstacles to investing in small and medium enterprises (SMEs) and allows investors to build diverse portfolios, boosting liquidity to levels usually reserved for larger public corporations.
Emanuele Francioni, CEO of Dusk, showed excitement about collaborating with NPEX. “Partnering with NPEX to create the first DLT-powered security exchange is a landmark achievement for Dusk. Our expertise in DLT and NPEX’s SME market experience will set new industry standards for secure, transparent, and efficient financial solutions, meeting the demands of today’s dynamic market,” he said.
Mark van der Plas, CEO of NPEX, further emphasized the importance of the cooperation, stating, “Our collaboration with Dusk reflects our dedication to leveraging advanced technology to enhance regulatory compliance and service efficiency. Introducing the first security exchange powered by Dusk DLT technology is a monumental step forward, offering not-before-seen functionality to our clients.”
The global perspective
NPEX is positioned to become a leader in utilizing Distributed Ledger Technology (DLT) for regulated financial asset issuance and trading, aligning strategically with the changing regulatory environment for DLT in Europe.
Interestingly, this strategic partnership aligns with the growing benefit of regulatory frameworks like the DLT Pilot Regime and the Markets in Crypto Assets (MiCA), which are forming the regulatory landscape for the use of blockchain.
NPEX sets a precedent by adopting DLT and encouraging other financial institutions to do the same. This means that as much as Crypto Assets Service Providers (CASPs) and stablecoins are being regulated, it’s high time the financial market Infrastructures adopted Distributed Ledger Technology (DLT) to benefit the entire financial sector.
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