In brief
- Pending regulatory approval, the NYSE plans to use Avalanche as the core ledger for clearing and settlement on its tokenized securities platform.
- Analysts described the selection as a major credibility boost for Avalanche. One expert noted it followed about a year of testing.
- However, the platform will use dedicated infrastructure rather than the public C-Chain, and experts caution that this won’t necessarily create value for $AVAX.
This week, the New York Stock Exchange chose Avalanche to provide infrastructure for a tokenized securities platform it is preparing. Experts say the move is significant for Avalanche’s reputation, but caution that it may not increase the value of the network’s $AVAX token.
On Monday, Ava Labs announced that Avalanche would provide the "core ledger technology" for a tokenized securities platform developed by NYSE parent Intercontinental Exchange. Subject to regulatory approval, the product is designed to enable 24/7 trading, clearing, and settlement of tokenized securities.
Carlos Guzman, a research analyst at market maker GSR, told Decrypt it’s “definitely a big win for the project.”
“Having NYSE choose its tech for settlement is a big institutional credibility boost, and it validates the benefits blockchain tech can provide to traditional financial plumbing with instant settlement and programmability,” he said.
Luther Maday, head of North America at crypto payments firm Mercuryo, told Decrypt the decision followed a year of testing on Avalanche, indicating that the network had passed checks for "performance, reliability, and control."
"NYSE has chosen the technology for the clearing and settlement layer, which is a much deeper use of blockchain than simply issuing a tokenized asset on a network," Maday added.
Avalanche’s $AVAX token has gained 3.6% over the past day, reaching $8.64, according to Decrypt data. But experts caution that supplying infrastructure does not necessarily lead to a long-term rise in the token’s value.
"NYSE will be using Avalanche’s infrastructure for clearing and settlement, so the actual trading will still happen off-chain," Guzman explained.
As a result, NYSE activity will use dedicated Avalanche infrastructure, not the public C-Chain, where most of the network’s activity takes place.
"I would be careful about translating the news directly into expectations for activity on the public C-Chain," Maday said.
Maday said it would be worth watching how the $AVAX token is used within the dedicated infrastructure. He also suggested that stablecoin liquidity, validator activity, and network fees could benefit.
The NYSE has also partnered with Blockchain.com to sell tokenized stocks and ETFs to crypto investors. Its parent company, ICE, is working with OKX on a 24/7 tokenized stock venue under an SEC exemption. Morgan Stanley, meanwhile, has begun tokenizing its own securities.
Not all companies are interested, however. All seven so-called "Magnificent Seven" stocks—including Apple and Meta—opted out of having their shares tokenized on the OKX-ICE venue, as did dozens of other companies.
Even if tokenization takes off, $AVAX investors are not guaranteed to profit.
"The main question for Avalanche is whether it can do what other blockchains have struggled to do: capture value," Misha Putiatin, founder of collateral markets platform Symbiotic, told Decrypt. "Avalanche has always had an unusually outcome-focused team for this industry, so I suspect they have plans for that, but it remains to be seen."
Ava Labs did not immediately respond to Decrypt’s request for comment.
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