NYSE to develop tokenized securities platform…seeks 24-hour on-chain trading of U.S. stocks

The New York Stock Exchange (NYSE) has begun developing a blockchain-based platform for trading and settling tokenized securities. The initiative aims to enable 24-hour trading and instant settlement for U.S.-listed stocks and ETFs.

According to Business Wire on the 19th, the NYSE said it is developing a new digital platform that will allow tokenized securities to be traded and settled on-chain, and plans to pursue the necessary regulatory approvals. The platform is intended to support 24-hour trading in U.S.-listed stocks and ETFs, and to enable fractional trading down to the decimal level as well as instant settlement using tokenized capital.

The NYSE explained that the platform combines its existing “Pillar” matching engine with a blockchain-based post-trade system. It is designed to support multiple blockchains for settlement and custody processes, and also includes stablecoin-based funding.

After regulatory approval, the platform is expected to include for trading not only tokenized shares that are interchangeable with existing securities, but also tokens issued directly in the form of digital securities. Holders of tokenized shares will be entitled to dividends and voting rights on the same basis as conventional shareholders. Trading will be opened to broker-dealers that meet relevant regulatory requirements, with the same access conditions applied.

The platform is part of the digital strategy of ICE, the NYSE’s parent company, and ICE is also overhauling its clearing infrastructure to fit a 24-hour trading environment. To that end, it is working with global banks such as BNY and Citi on plans to link tokenized deposits to the clearing system.

Lynn Martin, president of NYSE Group, said, “NYSE has evolved market structure for centuries,” adding, “Based on high regulatory standards and trust, we will build on-chain market infrastructure to meet demand in the digital finance environment.”

The market is interpreting the announcement as a signal that traditional securities markets are beginning to embrace tokenization and blockchain-based settlement in earnest. Analysts also say that if 24-hour trading and instant settlement become a reality, medium- to long-term changes across the stock market’s overall trading and clearing structure will be unavoidable.