NYSE is launching a 24/7 tokenized securities platform
In what might be one of the clearest signs yet of crypto's mainstream acceptance, the New York Stock Exchange is planning to launch a platform for the trading and settlement of tokenized securities.
The platform, which is still pending regulatory approvals, would offer investors 24/7 operations, including instant settlement, orders sized in dollar amounts and stablecoin-based funding.
NYSE said it will combine its Pillar matching engine protocol with blockchain-based post-trade systems, which will support multiple blockchains for custody and settlement.
According to the exchange, the platform will "power a new NYSE venue" that supports both the trading of tokenized shares fungible with traditionally issued securities, as well as tokens natively issued as digital securities.
Tokenized shareholders will be able to participate in traditional shareholder dividends and governance rights.
“For more than two centuries, the NYSE has transformed the way markets operate,” Lynn Martin, president of NYSE Group, said in a statement.
“We are leading the industry toward fully on-chain solutions, grounded in the unmatched protections and high regulatory standards that position us to marry trust with state-of-the-art technology.
"Harnessing our expertise to reinvent market infrastructure is how we’ll meet and shape the demands of a digital future."
The Intercontinental Exchange (ICE), which is the parent company of the NYSE, is currently working with the Bank of New York (BK) and Citigroup (C) to support tokenized deposits across ICE's clearinghouses. It operates six clearing houses around the world.
ICE said that this will allow customers to transfer and manage money outside of traditional banking hours, while also accommodating funding requirements over different jurisdictions and time zones.
During Citi's third-quarter earnings call in October, CEO Jane Fraser said that the bank was seeing increased demand for tokenized solutions from its institutional customer base.
“For our client base, the institutional client base, we see tokenized deposits as delivering what the client needs, and this is an area that we've invested in most heavily,” Fraser said.
“And what the clients are after is real-time money movement with minimal to no friction and low cost.”
She added that gaining access to "interoperable, multibank, cross-border, always on payment solutions" is what's driving interest in tokenization among institutions.
Citi also said in October that it was collaborating with Coinbase (COIN) in an effort to develop digital asset payment tools for the bank’s institutional clients.
The initial phase of the partnership will be focusing on fiat pay-ins/pay-outs, or the conversion of traditional currency into and out of digital asset or crypto ecosystems, as well as “payments orchestration.”
The effort will be supported by Coinbase's on/off ramps.
According to a press release, the launch of NYSE's tokenized platform is part of ICE's broader digital strategy, which includes implementing 24/7 trading into its clearing infrastructure, and potentially integrating tokenized collateral.
"Since its founding, ICE has propelled markets from analog to digital,” Michael Blaugrund, vice president of strategic initiatives at ICE, said in a statement.
“Supporting tokenized securities is a pivotal step in ICE's strategy to operate on-chain market infrastructure for trading, settlement, custody, and capital formation in the new era of global finance.”