The New York Stock Exchange is preparing a major shift in US equity market infrastructure by planning support for tokenized securities and continuous 24/7 trading. The exchange aims to modernize trading settlement and information flow across global markets. If approved regulators would allow a new NYSE venue dedicated to digital securities using blockchain-based settlement systems.
The planned system combines the NYSE Pillar matching engine with blockchain post-trade infrastructure. The platform can support multiple blockchains for settlement and custody. NYSE stated the venue would handle both tokenized versions of existing shares and securities issued natively in digital form.
Tokenized shareholders would keep identical dividend and governance rights as traditional shareholders. Qualified broker-dealers would access the platform on a nondiscriminatory basis. This approach aligns tokenized securities with existing equity market rules.
US equity markets still rely on a layered structure designed before digital trading dominated. Separate entities manage trading, clearing, settlement, and custody. Each entity maintains independent ledgers, which require constant reconciliation.
This structure ties up capital during settlement windows. Counterparty risk remains until trades fully clear. Reconciliation across intermediaries increases costs and operational exposure.
Fixed trading hours also restrict markets despite global information flows. Price-sensitive data moves continuously across regions and time zones. Why should equity markets remain closed when information never stops?
The tokenization effort forms part of a broader digital strategy at Intercontinental Exchange, the NYSE parent company. ICE is preparing its clearing infrastructure to support around-the-clock trading. This preparation supports margin management across time zones.
ICE confirmed work with banks, including BNY and Citi. The initiative enables tokenized deposits across ICE clearinghouses. Clearing members could manage funds outside standard banking hours.
Tokenized deposits allow margin obligations to update continuously. This structure supports global trading activity without overnight funding gaps. The approach also reduces reliance on traditional banking schedules.
Tokenization addresses settlement inefficiencies directly through shared digital ledgers.
Ownership updates can occur in near real time. Trading and settlement no longer operate as disconnected processes.
Atomic delivery and payment reduce settlement risk. Collateral and cash no longer remain locked during clearing delays. This change improves capital efficiency for institutions.
NYSE leadership framed the shift as part of a long-term evolution. NYSE Group President Lynn Martin said the exchange aims to lead fully on-chain solutions under strong regulatory standards. The strategy seeks to merge established market trust with modern technology.
In April 2024, the NYSE data analytics team surveyed market participants about extended trading hours. The survey reflected rising interest in always-on market models similar to cryptocurrency markets. The current plan builds on that earlier exploration without altering the fundamental nature of stocks.
Tokenization does not redefine equity ownership. It changes how systems record transfer and settlement. The focus remains on processing efficiency rather than asset redesign.
The New York Stock Exchange plans to offer tokenized securities and 24/7 trading using blockchain settlement. The move targets faster settlement, lower risk, and better capital efficiency. If approved, the structure could modernize US equity markets while keeping shareholder rights intact.