On Monday, the New York Stock Exchange (NYSE) unveiled its latest plan to develop a tokenized securities platform, utilizing blockchain technology to facilitate 24/7 stock trading, now seeking regulatory approval.
New Digital Trading Venue At NYSE
According to Monday’s announcement, the proposed digital platform will offer a tokenized trading experience that includes around-the-clock operations, instant settlements, dollar-sized orders, and stablecoin (dollar-pegged cryptocurrencies) funding options.
By integrating the NYSE’s “advanced Pillar matching engine” with blockchain-based post-trade systems, the firm disclosed that the new platform will support multiple chains for settlement and custody, streamlining the trading process significantly.
Once regulatory approvals are secured, this platform will reportedly create a new venue at the NYSE for trading tokenized shares. These shares will not only be fungible with traditional securities but will also comprise tokens that are issued natively as digital assets.
Interestingly, tokenized shareholders will retain their rights, including eligibility for dividends and participation in company governance, much like traditional shareholders. The trading venue aims to align with established market structure principles and will provide non-discriminatory access to all qualified broker-dealers.
The launch of this tokenized securities platform is part of the Intercontinental Exchange’s (ICE) broader digital strategy, which includes preparing its clearing infrastructure for continuous trading and potentially integrating tokenized collateral.
Competition Heats Up
ICE is collaborating with major financial institutions like BNY Mellon and Citigroup to facilitate tokenized deposits across its clearinghouses. This effort will help clearing members manage funds and fulfill margin requirements outside of regular banking hours.
Lynn Martin, President of NYSE Group, emphasized the significance and innovation surrounding this development, stating:
For more than two centuries, the NYSE has transformed the way markets operate. We are leading the industry toward fully on-chain solutions grounded in unmatched protections and high regulatory standards.
The company’s President further stated that the New York Stock Exchange aims to combine trust with “state-of-the-art technology,” effectively reinventing market infrastructure to meet the evolving demands of a digital future.
Michael Blaugrund, Vice President of Strategic Initiatives at the Intercontinental Exchange, echoed Martin’s sentiment, noting:
Since its founding, ICE has propelled markets from analog to digital. Supporting tokenized securities is a pivotal step in our strategy to operate on-chain market infrastructure for trading, settlement, custody, and capital formation in the new era of global finance.
In parallel to these developments, the NYSE’s main competitor, Nasdaq, along with the CME Group, has intensified efforts to provide institutional investors with a regulated mechanism to measure cryptocurrency markets.
They recently reintroduced the Nasdaq Crypto Index, renamed as the Nasdaq-CME Crypto Index (NCI), designed to support products such as exchange-traded funds (ETFs) and structured funds. This move aims to establish clearer rules and governance for index-based cryptocurrency exposure.
Featured image from DALL-E, chart from TradingView.com
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