New York Stock Exchange to Promote Building a 24-Hour Trading Platform for Blockchain-Based 'Tokenized Stocks'

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New York Stock Exchange to Promote Development of 24-Hour Blockchain-Based ‘Tokenized Stock’ Trading Platform

The New York Stock Exchange(NYSE) is developing a ‘tokenized securities’ trading platform utilizing blockchain technology. It aims to introduce a new trading system where stocks and exchange-traded funds(ETFs) can be traded 24 hours a day and settled with stable digital assets.

NYSE and its parent company Intercontinental Exchange(ICE) announced that they are combining their trading engine ‘Pillar(Pillar)’ with a blockchain-based post-trade system to support real-time settlement and 7-day, 24-hour trading. Once approved by regulators, this platform will serve as a dedicated exchange for tokenized securities such as stocks and ETFs issued in digital form.

According to this plan, investors will be able to settle trades in real-time using stablecoins, rather than the traditional T+1 settlement cycle of the US stock market. Tokenized stocks refer to the issuance of a company’s physical shares as digital assets on the blockchain, offering new investment approaches such as 24-hour trading and fractional purchasing.

NYSE aims to trade more than 22 hours on weekdays in response to increasing global demand for US stocks. It has already announced plans to apply for extended trading hours with the US Securities and Exchange Commission(SEC) in October 2024. Its competitor, Nasdaq, is also exploring the introduction of 24-hour trading on weekdays related to expanded tokenized trading by 2025.

ICE Accelerates Blockchain Transition… Expanding Bank Collaborations

ICE and NYSE’s digital transformation strategy goes beyond extending trading hours, aiming for ‘on-chain’ integration of the entire process including trading, settlement, custody, and capital raising. ICE is already collaborating with major banks to introduce stablecoin deposit systems within clearinghouses. This will enable more stable asset management outside of regular banking hours, greatly enhancing convenience for member firms and investors.

NYSE Group President stated, “Throughout our over 200-year history, NYSE has continuously innovated the financial market infrastructure,” and emphasized, “We will combine top-tier regulatory frameworks and trust with cutting-edge technology to realize a fully on-chain solution.”

ICE’s Vice President of Strategy also said, “Supporting tokenized securities marks a turning point in building the core infrastructure for a new era of global finance,” accelerating ICE’s plans for a new market structure.

NYSE’s move aligns with Wall Street’s broader trend of integrating blockchain technology into traditional finance. This is not just digital transformation but a comprehensive reorganization of settlement and clearing systems based on code, ensuring regulatory compliance, transaction transparency, and real-time responsiveness.

The project, combining the main keywords ‘New York Stock Exchange’, ‘tokenized stocks’, and ‘blockchain’, could bring significant long-term changes to the global capital market structure. The pace of market adoption will likely depend on the US SEC’s stance and the participation of existing financial institutions.

Frequently Asked Questions (FAQ)

Q. How does a blockchain-based trading platform differ from the traditional stock market?

A. Blockchain platforms process transaction records in real-time and can transfer assets without intermediaries. This approach enhances settlement and payment speed, providing a more transparent and accessible financial environment for users.

Q. Can individual investors use this platform?

A. After regulatory approval, individual investors are likely to gain access to tokenized stocks or ETFs. Especially if fractional ownership features are introduced, allowing small-scale investors to participate more easily.

Q. Why is regulatory approval important for the platform’s launch?

A. Approval from financial regulators is essential for investor protection and maintaining market order. Agencies like the SEC need to thoroughly review the platform’s structure, technology, and fund flows before it can officially serve the public.