The New York Stock Exchange (NYSE) has signed a memorandum of understanding (MoU) with tokenization platform Securitize, as part of a broader effort to develop blockchain-based stock trading infrastructure for Wall Street.
Securitize will become the first digital transfer agent, enabling it to mint blockchain-based shares for stocks and exchange-traded funds (ETFs) on the upcoming tokenized securities platform, the Digital Trading Platform, according to a Tuesday announcement from Intercontinental Exchange (ICE), parent company of the NYSE.
Under the MoU, the companies plan to develop a digital transfer agent program and standards for digital transfer agents and tokenization agents, with a focus on regulatory, operational and technology requirements for tokenized securities infrastructure.
The announcement builds on ICE’s Jan. 19 plan for a tokenized securities venue designed for 24/7 trading, instant settlement, stablecoin-based funding and onchain settlement.
ICE said the planned venue is designed to support both tokenized shares that are fungible with traditionally issued securities and securities issued natively as digital tokens, while preserving traditional shareholder dividends and governance rights. Tokenized stocks are shares of traditional company stocks minted on the blockchain ledger, offering investors exposure to stock prices with advantages including 24/7 accessibility and fractional ownership.
The agreement is the latest sign that major exchange operators are building blockchain-based trading and settlement infrastructure, even as the regulatory and market structure for tokenized public securities is still taking shape.
The news follows the US Securities and Exchange Commission giving the regulatory greenlight to Nasdaq’s pilot proposal on Thursday to support the trading of tokenized versions of high-volume stocks and securities.
NYSE, Securitize, sign MOU. Source: ir.theice.com
“As we explore how tokenization can enhance capital markets, it is critical that new infrastructure is developed in a way that preserves the trust, transparency, and protections investors expect,” said Lynn Martin, president at NYSE Group.
Related: US financial markets ‘poised to move on-chain’ amid DTCC tokenization greenlight
Tokenized stocks surpass $1 billion amid rising demand
Investor demand for blockchain-based tokenized stocks is increasing. The total value of tokenized stocks surpassed $1 billion on March 10, in a significant milestone for the real-world asset (RWA) sector.
Over the past 30 days, tokenized stockholders rose by 16% to 193,140, while the monthly transfer volume increased by 45% to $2.5 billion, according to data from RWA.xyz.
Still, tokenized stocks are only the sixth-largest segment of the $26 billion value locked into tokenized RWAs. Tokenized treasury debt was ranked first with $11.8 billion, and tokenized commodities second with over $5 billion.
Tokenized stocks, total value, all-time chart. Source: RWA.xyz
Some of the leading crypto exchanges are also racing to launch tokenized stock offerings. Coinbase launched 24/7 stock perpetual futures for non-US traders on Friday, offering cash-settled exposure to major US stocks and indices, including Apple and Nvidia.
Crypto exchanges Binance and Kraken have also launched tokenized perpetual futures trading for non-US traders, along with numerous other offshore platforms.
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