- NYSE plans to use Avalanche as the settlement ledger for its tokenized securities platform.
- The platform is designed for 24/7 trading and settlement across multiple blockchain networks.
- NYSE will use a custom blockchain built on Avalanche technology rather than Avalanche’s public chain.
The NYSE Avalanche plan gives Avalanche a central role in the New York Stock Exchange’s upcoming tokenized stock market. NYSE said Avalanche will serve as the core ledger for clearing and settling trades on its planned NYSE-affiliated alternative trading system, subject to regulatory approval. The exchange also said the venue is being built for round-the-clock trading and settlement while supporting tokenized stocks issued on multiple blockchain networks. Rather than relying on Avalanche’s public chain, NYSE will run a custom blockchain built with Avalanche technology to fit its regulatory and operational requirements, according to comments from Ava Labs.
NYSE Avalanche settlement role
NYSE said Avalanche will provide the ledger technology to the clearing firm supporting the planned tokenized securities venue. That gives the blockchain a central settlement function in the exchange’s effort to bring more of the equities workflow onchain while keeping the platform tied to an NYSE-affiliated alternative trading system.
Dennis Lee, head of digital issuance at NYSE, said the exchange wanted a settlement ledger that could process transactions quickly, keep costs predictable and restrict access to approved participants. He said NYSE is evaluating blockchain tools based on the specific job they need to perform and that Avalanche met those requirements.
How NYSE Avalanche is being built
John Nahas, chief business officer at Ava Labs, told CoinDesk that NYSE will not use Avalanche’s public blockchain for settlement. Instead, the exchange plans to operate its own custom blockchain built on Avalanche technology and tailored to the platform’s regulatory needs.
Ava Labs said this work had been in development for more than a year. Nahas said the exchange and Ava Labs went through technical, business and ecosystem reviews before Avalanche was selected, suggesting the choice followed a broader evaluation process rather than a simple infrastructure test.
NYSE Avalanche supports multiple blockchains
NYSE said Avalanche will not be the only blockchain involved in the platform. The system is being designed to support tokenized stocks issued on a range of networks, with those assets connecting back to NYSE’s custom Avalanche chain for trade recording and settlement.
The exchange is also not trying to move every part of stock trading onto one blockchain. Its plan is to combine the existing Pillar trading engine with blockchain-based clearing, settlement and custody, with the broader aim of enabling 24/7 trading, instant settlement and stablecoin-based funding.
Wall Street firms expand tokenization projects
The NYSE Avalanche decision comes as several large market infrastructure firms build their own tokenization systems. Last week, NYSE expanded its transfer agent network to six firms by adding Broadridge Financial Solutions, Computershare, Equiniti and Superstate to existing partners Securitize and tZERO.
Outside NYSE, Nasdaq is also developing tokenized stock infrastructure and has partnered with the parent company of crypto exchange Kraken to distribute blockchain-based shares globally. DTCC launched a tokenization service last month using its private Besu blockchain and the Canton Network, although that project focuses on custody and transfers rather than operating a trading venue.
Conclusion
The NYSE Avalanche arrangement shows how the exchange is building its tokenized stock platform around a dedicated settlement ledger while still allowing support for stocks issued on different blockchain networks. NYSE said the venue is intended to offer around-the-clock trading and settlement, pending regulatory approval, and Ava Labs said the exchange will use a custom chain built with Avalanche technology instead of the public network. The move also places NYSE more firmly in the wider Wall Street tokenization race, where firms including Nasdaq and DTCC are developing separate blockchain-based systems for securities trading, settlement, custody and transfer.
Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
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