The New York Stock Exchange (NYSE) has announced it is working on a new platform that will allow trading of tokenized versions of US stocks and exchange-traded funds (ETFs), as well as blockchain-based trading. Subject to regulatory approvals, this initiative has the potential to make traditional capital markets open 24/7, similar to cryptocurrency markets.
What does the new structure at the NYSE mean?
According to the New York Stock Exchange, the developed platform will offer features such as 24/7 trading, fractional share purchases, dollar-based order entry, and instant trading with tokenized capital. The system is also designed to support stablecoin-based funding, allowing investors to open and close positions without being tied to traditional banking hours.
The new structure combines the NYSE's existing Pillar matching engine with a blockchain-based post-transaction settlement infrastructure. The platform is planned to support multiple blockchains in trading and custody processes. The NYSE states that this infrastructure will form the basis of a new exchange platform focused on digital securities. If approved, this new structure will encompass both tokenized assets that are convertible one-to-one with traditional stocks and securities issued directly digitally.
Investors holding tokenized shares will have the same rights as traditional shareholders in terms of dividends and governance rights. Access will be provided through qualified brokerage firms and on a non-discriminatory basis.
This move follows the lead of Intercontinental Exchange (ICE), the parent company of the NYSE. ICE aims to create a market structure suitable for tokenized capital and asset transfers while preparing its trading infrastructure to operate 24/7. The company is also working closely with banks in this regard.
ICE announced that it is working with major banks such as BNY and Citi to enable the use of tokenized deposits within trading institutions. This structure will allow market participants to manage their funds outside of traditional banking hours and meet collateral requirements more flexibly across different time zones and jurisdictions. NYSE Group President Lynn Martin stated that they have been a pioneer in transforming market structures for over two centuries, and that they aim to combine trust and advanced technology with fully on-chain solutions. ICE Vice President of Strategic Initiatives Michael Blaugrund emphasized that tokenized securities are opening the door to a new financial era where trading, escrow, custody, and capital creation all take place on-chain. This move by the NYSE is a continuation of its earlier efforts to extend trading hours. Indeed, a survey of market participants in April 2024 revealed that structures similar to the "always-on" model in crypto markets are gaining increasing interest in the traditional financial world.
