TLDR
- The NYSE is launching a new blockchain-based trading venue for tokenized securities.
- The digital platform will operate 24/7 and provide instant settlement using stablecoins.
- The NYSE plans to run both traditional and digital exchanges simultaneously.
- The new platform will focus on native digital issuance of equities, unlike current tokenization efforts.
- Assets will be stored in digital wallets, giving investors full control over their securities.
The New York Stock Exchange (NYSE) has revealed plans to create a fully independent trading venue for tokenized securities. This digital platform will operate alongside the existing traditional market, offering 24/7 trading and instant settlements. Crypto industry leader Changpeng Zhao (CZ), former CEO of Binance, praised the move as “bullish for crypto and crypto exchanges.”
NYSE to Launch Blockchain-Based Venue for Tokenized Assets
The NYSE is preparing to launch a digital exchange that will run on blockchain technology, focusing on tokenized securities. This new venue will provide continuous access, unlike the traditional NYSE, which operates within fixed hours. By leveraging blockchain, the venue promises instant settlements and improved transaction efficiency.
According to Simon Taylor, a fintech analyst, the NYSE will operate two separate trading platforms. The traditional venue will continue with its standard trading hours and T+1 settlement, while the new digital platform will allow transactions around the clock, with stablecoins facilitating settlements. Taylor stated, “They’re not choosing between traditional and digital, but offering both side by side.”
Tokenization Efforts Target Native Digital Issuance
The NYSE’s digital venue is expected to target native digital issuance of equities rather than wrapping existing assets in digital tokens. Unlike current tokenization efforts by firms like DTCC and State Street, which create digital wrappers for traditional assets, the NYSE aims to fully integrate digital securities. The plan will directly settle transactions on the blockchain, providing greater transparency and control for investors.
In this new model, assets will be stored in digital wallets, enabling investors to retain custody of their securities. Stablecoins will be used to facilitate capital raising and funding on the platform, offering advantages like lower fees and faster processing times.
As Taylor put it, “NYSE is building a new way to bring equities on-chain AND the venue to trade them.”
This innovation positions the NYSE in direct competition with blockchain-based startups that already cater to the crypto community. However, the NYSE’s established reputation could offer the new platform a unique advantage in attracting institutional investors.
CZ Hails NYSE’s Digital Exchange as a Positive Step
Changpeng Zhao, also known as CZ, commented on the NYSE’s announcement, calling it a “bullish” move for the cryptocurrency industry.
He highlighted the potential for tokenization to reshape the global financial landscape, especially in terms of making trading more efficient and accessible. By integrating blockchain technology, the NYSE could open new avenues for crypto adoption and expansion within traditional financial markets.
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