The exchange (NYSE) plans to combine its technology that matches sellers and buyers with private blockchain networks, to allow for the trading of tokenized securities in real-time, Bloomberg News reported Monday (Jan. 19), citing comments from executives. Launch of this new platform could come later this year, pending regulatory approval, the report added.
“This reflects an evolution of NYSE’s trading capabilities which went from trading floor, to electronic order-book, to blockchain,” Michael Blaugrund, vice president of strategic initiatives at NYSE parent Intercontinental Exchange, said in an interview with Bloomberg.
“It allows for new types of investor accessibility, and will create new opportunities for retail to participate in the stablecoin-funded markets that have attracted their attention,” Blaugrund added.
He said his company is in talks with the Securities and Exchange Commission as it seeks permission to deploy the new platform, which would allow for trades to be funded, and settled in real time, rather than the one-day delay found in the current system.
“We think it aligns with the retail investor’s emerging desire to be able to trade something at 5:04 p.m. on a Saturday and then use that money to buy something else at 5:05 p.m. on a Saturday,” Blaugrund added. “This would facilitate that trade in a way that traditional equity infrastructure cannot.”
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The report characterizes the effort as addressing some of the core elements of how stocks are defined, issued and settled, which could in turn determine whether tokenization becomes part of Wall Street’s infrastructure, as the NYSE is America’s largest equities exchange operator in terms of volume.
The news comes days after LSEG—which operates the London Stock Exchange—introduced its new digital settlement service, known as Digital Settlement House (LSEG DiSH).
The service allows for “programmatic and instantaneous settlement between independent payment networks, both on- and off-chain,” LSEG said in a news release.
In other tokenization news, PYMNTS wrote last week about the growing uses for tokenized deposits within the banking system.
Instead of replacing deposits or payment rails, banks are viewing tokenized deposits as a way to represent existing balances on distributed ledger infrastructure, with the aim of bolstering settlement timing, transparency and operational efficiency.
“That focus reflects growing recognition that legacy payment processes, built around batch windows and delayed settlement, are increasingly out of step with the needs of large corporate and institutional clients,” PYMNTS wrote. “The growth in tokenized deposits will, in effect, herald the end of the ‘end of day’ construct of time-staggered settlements.”
