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New York Stock Exchange partners with Securitize to develop its platform for tokenized shares.
This initiative arises as the competition to introduce equities to always-on blockchain markets intensifies following Nasdaq’s receipt of regulatory approval for its tokenization strategy.
New York Stock Exchange (Shutterstock)
Key Points:
- The New York Stock Exchange has engaged BlackRock-backed Securitize, a tokenization expert, to assist in developing its tokenized securities platform.
- Securitize, an SEC-registered transfer agent, is projected to be among the initial firms to create tokenized stocks and ETFs on the platform, subject to regulatory approval.
- This action highlights a wider movement by NYSE and Nasdaq to transition stock trading onto blockchain technology, enabling continuous trading and near-instant settlements.
The New York Stock Exchange (ICE) is collaborating with tokenization firm Securitize (CEPT) to establish the framework for trading tokenized securities, as detailed in a press release distributed on Tuesday to CoinDesk.
Securitize aims to go public this year through a SPAC agreement with Cantor Equitize Partners (CEPT). Pre-market, CEPT shares have increased by 6%, while ICE shares remain unchanged.
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The two organizations have entered into a memorandum of understanding to create NYSE’s forthcoming Digital Trading Platform. Securitize will act as a design collaborator, concentrating on the functioning of transfer agents—entities responsible for tracking ownership and managing corporate actions—when securities are issued and settled using blockchain technology.
Securitize, which is supported by major asset managers like BlackRock and Ark Invest and is registered with the SEC as a transfer agent, is anticipated to be among the first entities allowed to issue tokenized versions of stocks and ETFs on the platform, contingent on regulatory approvals.
The firm’s broker-dealer division may also engage in trading, establishing its presence in both issuance and market activities.
This initiative coincides with the increased focus of traditional exchange giants such as NYSE and Nasdaq on tokenization efforts aimed at integrating blockchain technology into stock trading. This advancement would facilitate continuous trading and prompt settlements, akin to cryptocurrency markets.
Recently, Intercontinental Exchange, the parent company of NYSE, invested in the crypto exchange OKX to develop tokenized stocks and derivatives products. Competing exchange Nasdaq has received regulatory endorsement for its framework for trading tokenized stocks and has partnered with Kraken for the global distribution of stock tokens.
"As we investigate how tokenization can improve capital markets, it is essential that new infrastructure is developed to maintain the trust, transparency, and protections that investors expect," stated NYSE Group President Lynn Martin.
Read more: Here is why Nasdaq and owner of NYSE are putting the $126 trillion equity market on blockchain
