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NYSE taps Avalanche for tokenized stock settlement

The NYSE-affiliated platform will use Avalanche-based ledger technology to clear tokenized securities, while its planned 24/7 trading venue awaits regulatory approval.

Uruguay Can Editorial

NYSE taps Avalanche for tokenized stock settlement

The NYSE-affiliated tokenized securities platform was still in development. On Nov. 9, Ava Labs said it would use Avalanche as the core ledger technology for the platform’s clearing firm, bringing blockchain into the planned venue’s trade settlement, according to Ava Labs’ announcement.

The venue is an alternative trading system, or ATS, affiliated with the New York Stock Exchange. It is designed to support 24/7 trading, clearing and settlement for subscribers, but still depends on regulatory approval. For you, the key distinction is that Avalanche is being selected for the back end that records and settles trades; the announcement does not say the platform is already open for trading.

Will the platform use Avalanche’s public blockchain?

No: CoinDesk reported that the NYSE plans to run its own custom blockchain built with Avalanche technology, based on an interview with Ava Labs chief business officer John Nahas. The chain would be tailored to the platform’s regulatory needs, rather than using Avalanche’s public network for settlement.

That setup is meant to give the exchange more control over who can participate and help keep performance and costs predictable. NYSE head of digital issuance Dennis Lee said in Ava Labs’ announcement that the platform could support equities listed on multiple blockchains, while the ledger for recording and settling trades needed to be fast, reliable and permissioned. In other words, the stocks may come from different networks, but the settlement layer would be built around Avalanche technology.

What comes next for the NYSE’s tokenized stock venue?

Regulatory approval remains a condition for the planned 24/7 service, and the announcement gives no launch date. CoinDesk reported that the NYSE’s wider plan pairs its Pillar trading engine with blockchain-based clearing, settlement and custody, with instant settlement and stablecoin funding among the platform’s aims.

The selection adds a specific blockchain to Wall Street’s tokenization push: Nasdaq is also developing tokenized stock infrastructure, while the Depository Trust & Clearing Corporation has launched a tokenization service. For you, the immediate change is a named ledger partner; the trading venue itself is still forthcoming.

Sources