NYSE will use the Avalanche blockchain for clearing and settlement on its planned tokenised stock platform. The deal was announced on 9 November, and AVAX rallied sharply. Launch is expected in the fourth quarter, pending SEC approval.
Photo: Avalanche will settle trades on NYSE's planned tokenised stock platform.
The New York Stock Exchange (NYSE), owned by Intercontinental Exchange (ICE), has since January been working on a trading platform for tokenised stocks and exchange-traded funds — digital versions of ordinary securities that can be traded and settled on a blockchain. The plan is round-the-clock trading, instant settlement and stablecoin-based funding, while shareholders keep ordinary rights such as voting and dividends. The platform still depends on approval from the US financial regulator, the SEC.
Avalanche will supply what Ava Labs calls "core ledger technology" to a clearing firm behind the NYSE platform, according to the announcement on 9 November. The platform is designed to support stocks issued on several different blockchains, but it is Avalanche that will record and settle the trades themselves.
"We're picking the right technology for each job," says Dennis Lee, the NYSE's head of digital issuance. He says the ledger settling the trades needs to be fast, predictable in cost and able to control who can participate.
NYSE will not use the public Avalanche network directly. According to John Nahas, chief business officer at Ava Labs, the exchange will instead run its own customised Avalanche-based chain, separate from the open network. That gives NYSE the ability to set its own customer-control requirements directly into the infrastructure.
"We selected Avalanche for its speed, throughput and ability to support a controlled network with the compliance requirements we need," Kevin Tyrrell, the NYSE's chief product officer, tells the Wall Street Journal. According to the WSJ, Avalanche will supply this technology exclusively to the platform, which is due to launch during the fourth quarter, subject to SEC approval.
The deal comes as several players develop infrastructure for tokenised securities. NYSE has separately brought in Blockchain.com to reach crypto investors with tokenised stocks and ETFs, while ICE and crypto exchange OKX are planning a separate round-the-clock tokenisation venue under an SEC exemption — a project that recently hit a setback when every "Magnificent Seven" stock, including Apple and Meta, and 67 companies in total, opted out of having their shares tokenised there. Morgan Stanley has also begun tokenising securities. An IMF study has meanwhile found that demand for tokenised stocks is real, but that they remain volatile and illiquid.
The cryptocurrency AVAX rose roughly 5–8 per cent in the hours after the announcement. Emin Gün Sirer, founder and chief executive of Ava Labs, points to the deal as proof that blockchains can carry market infrastructure itself rather than just individual products, citing what he calls round-the-clock, atomic settlement and predictable costs.
Sources: CoinDesk, Decrypt, Benzinga/TradingView
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