NYSE Takes Stock Trading On-Chain With New 24/7 Tokenized Securities Platform

TLDR

• The New York Stock Exchange is developing a platform for trading tokenized U.S. stocks and ETFs with 24/7 access, pending regulatory approval.
• The platform will support features including fractional shares, instant settlement, stablecoin funding, and multi-blockchain compatibility.
• ICE is working with banks like BNY and Citi to enable tokenized deposits across its clearinghouses for round-the-clock margin management.
• Binance founder CZ called the move “bullish” for crypto and crypto exchanges, while Ripple executive Reece Merrick described it as “big” news.
• The initiative follows similar moves by Nasdaq and broader SEC considerations for on-chain stock trading alongside crypto assets.

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The New York Stock Exchange announced Monday it is creating a platform for trading tokenized securities. The system would allow 24/7 trading of U.S. stocks and exchange-traded funds through blockchain technology.

The platform requires regulatory approval before launching. NYSE submitted its plans to regulators for review.

The new system will use the NYSE’s Pillar matching engine combined with blockchain infrastructure. This setup enables instant settlement of trades using tokenized capital.

Investors will be able to buy fractional shares and place orders in dollar amounts. The platform will accept stablecoin-based funding for purchases.

The exchange plans to support multiple blockchains for settlement and custody. Qualified broker-dealers will have access to the platform on equal terms.

Tokenized shares on the platform will function the same as traditional securities. Shareholders will keep their dividend and governance rights.

Parent Company Prepares Infrastructure

Intercontinental Exchange, which owns NYSE, is upgrading its clearing systems. The company is working with BNY and Citi to enable tokenized deposits.

This change allows clearing members to manage funds outside normal banking hours. Members can meet margin requirements across different time zones.

Lynn Martin, president of NYSE Group, said the exchange is moving toward fully on-chain solutions. The platform maintains regulatory standards while using new technology.

Michael Blaugrund, vice president of strategic initiatives at ICE, called tokenized securities a key part of the company’s strategy. ICE plans to operate on-chain infrastructure for trading, settlement, custody and capital formation.

Industry Reaction

Binance founder Changpeng Zhao responded to the announcement on social media. He stated the platform is positive for crypto and crypto exchanges.

Ripple executive Reece Merrick called the news “big” for the industry. He pointed to the 24/7 trading, fractional shares, and instant settlement features.

Galaxy Digital’s Alex Thorn described the move as an important step. He said the main benefit of tokenized stocks is access to decentralized finance protocols.

Market expert Adam Livingston predicted increased Bitcoin buying. He expects the platform to drive more investment activity.

Related Developments

The NYSE surveyed market participants in April 2024 about extended trading hours. The survey explored interest in round-the-clock trading similar to crypto markets.

The SEC is reviewing proposals for on-chain stock trading. In December, the agency advanced proceedings for tokenized securities trading on Nasdaq.

Other crypto stocks including Coinbase, Strategy, and Robinhood could become available for 24-hour trading. Circle’s CRCL token would also be supported.

Robinhood CEO Vlad Tenev noted that stock tokens are already available in the European Union. He said the U.S. should lead on crypto policy.

Coinbase is also developing tokenized securities offerings. Multiple exchanges are preparing for the shift to blockchain-based trading.

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