The New York Stock Exchange has partnered with Securitize to develop a tokenized securities trading platform that bypasses the Depository Trust & Clearing Corp., settling stocks directly on blockchain with 24/7 trading and instant settlement.
The Securitize Partnership
Securitize will become NYSE’s first digital transfer agent, creating shares for stocks and ETFs as digital tokens on a blockchain, The Wall Street Journal reported on Tuesday.
The two companies will design a digital transfer agent program, including standards for other transfer agents to issue and manage stocks as blockchain tokens in a compliant way.
Transfer agents keep records of investors, issue and cancel ownership certificates, facilitate dividend payments, and mail annual reports to shareholders.
Securitize expects its broker-dealer to connect with NYSE’s Digital Trading Platform, an alternative trading system for tokenized securities.
The 24/7 Trading Vision
NYSE which is owned by Intercontinental Exchange (NYSE:ICE) sought approval for the new tokenized securities platform in January.
The platform would offer round-the-clock trading and settle trades instantly. Investors would also be able to use stablecoins pegged to the U.S. dollar to fund trades.
This move advances beyond tokenized stocks trading outside the U.S., where issuers do not grant token holders the same benefits as shareholders, including dividend payouts and voting rights on stockholder proposals.
How NYSE Differs From Nasdaq
Last week, the SEC approved Nasdaq’s proposal to allow investors to trade certain high-volume stocks either as traditional shares or as tokens on the blockchain within Nasdaq’s existing exchange.
Nasdaq settles tokenized stocks and traditional shares through the DTCC.
NYSE’s plan creates a separate digital trading venue where tokenized stocks are issued and settled directly on blockchain without the DTCC.
This represents a fundamental restructuring of stock settlement infrastructure rather than an add-on to existing systems.
The Native Tokenization Advantage
Several brokerages and crypto exchanges have launched tokenized versions of popular U.S. stocks and ETFs to overseas investors.
However, some of these tokenized offerings have significantly deviated in value from underlying shares.
Critics point out that they are technically derivatives that don’t convey the same shareholder rights as underlying securities.
“Most of these tokenized equities efforts today, they’re not really tokenizing the equity. They’re creating derivatives or price trackers,” said Carlos Domingo, co-founder and CEO of Securitize. “So this is about really working with the issuers to do native tokenization.”
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