NYSE is preparing for real world implementation of its tokenized securities program after having participated in industry-wide testing.
Speaking at a National Assembly seminar in Seoul, NYSE President Lynn Martin said the exchange had joined The Depository Trust Company’s July tokenization initiative, adding detail to a project announced in January by NYSE parent Intercontinental Exchange.
On January 19, ICE announced it will launch a dedicated digital marketplace for NYSE’s Pillar matching engine and blockchain-based post-trade infrastructure that will support 24/7 trading, immediate settlement, fractional shares, dollar-denominated orders, and stablecoin funding. Subject to regulatory approval, it would accept tokenized customary securities and natively tokenized assets, and preserve dividends and governance rights.
The NYSE joined DTC’s July pilot, and DTCC said the July 15 tokenization involved more than 30 companies including NYSE, BlackRock, Goldman Sachs, JPMorgan, Nasdaq, Circle, Ondo Finance, Citadel Securities and Vanguard.
The exercise included tokenized representations of equity delivery-vs-payment at DTC, treasury and repo activity, securities lending, collateral pledges, equity transfers and central-counterparty margining. The tests were run on both DTCC’s private Besu network and the public Canton network. DTCC’s Tokenization Service is due in October this year.
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Separately, NYSE issued a regulatory framework for the clearance of trades of tokenized shares. An SEC filing in April allows eligible securities to be traded in tokens during the DTC pilot, and tokenized shares may share an order book with regular shares if they have identical ticker/CUSIP and rights/privileges, although order priority is unchanged.
Separately, the NYSE is working to launch a standalone digital venue. Securities settled in the current DTC pilot settle on a T+1 basis. Pending regulatory approval, the NYSE venue will settle immediately and will be open 24 hours a day and 7 days a week.
NYSE is building its own enabling infrastructure for digital assets. NYSE has also signed an agreement with Securitize, the first eligible digital transfer agent, to be a partner in the proposed platform’s blockchain-native securities minting.
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The next event is the DTCC’s planned October Tokenization Service launch. Under DTC pilot rules, NYSE must also give members 30 calendar days’ notice prior to commencing trading in tokenized products. Martin’s remarks suggest that NYSE still favors onchain settlement, but acknowledges that broader adoption will depend on regulatory and other operational considerations.
