Towards "24/7" trading! NYSE applies for approval of "around-the-clock blockchain trading platform"

On January 19th (Monday) local time, the New York Stock Exchange (NYSE), with a history of 233 years, announced that it is developing a blockchain-based "tokenized securities" trading platform aimed at achieving "24/7" trading of stocks.

The NYSE stated that it will seek approval from regulators to allow companies to issue securities presented in the form of digital tokens. Unlike the traditional model where the NYSE is only open on weekdays and closed at night, the new platform will offer "24/7" trading services. Additionally, the platform will support instant settlement and allow investors to fund transactions using stablecoins pegged to the US dollar.

This initiative means that the "around-the-clock trading" and "instant settlement" characteristics long associated with the cryptocurrency market are expected to be introduced into the regulated mainstream stock market. However, the NYSE has not yet provided a specific timeline for the platform's launch, and its final implementation still depends on the "green light" from regulators.

Goodbye to "T+1": Instant Settlement and Around-the-Clock Liquidity

For investors, the most significant potential change of this platform lies in the innovation of the trading mechanism. The NYSE clearly stated that the new platform aims to provide 24/7 trading services. This will fundamentally change the current model of the US stock market, which is only open on weekdays and closed at night, addressing the time barrier faced by cross-timezone investors.

In addition to trading hours, settlement speed is a core highlight of this reform.

The traditional financial industry practice adopts a "T+1" settlement system, meaning that cash and stocks for investors are not actually settled until the next business day after the transaction occurs. This delay forces brokers to hold extra capital as a buffer to guard against the risk of counterparty default.

The NYSE pointed out that the new platform will utilize blockchain technology to achieve instant settlement. This not only frees up occupied funds but also significantly reduces systemic risk. Looking back at the GameStop incident in January 2021, during which brokers like Robinhood were forced to suspend trading due to a surge in capital requirements during the settlement period. The instant settlement feature of blockchain could theoretically prevent such market disruptions caused by liquidity crises.

Moreover, the NYSE stated that users of the new platform will be able to use stablecoins (a type of cryptocurrency pegged to the US dollar) for the flow of trading funds, further bridging the payment channels between traditional fiat currencies and digital assets.

Wall Street's "Tokenization" Race: From Nasdaq to Major Banks

The NYSE's move is not an isolated event but a reflection of Wall Street giants accelerating their layout of blockchain infrastructure. Against the backdrop of the Trump administration's shift towards a more crypto-friendly policy, traditional financial institutions (TradFi) are actively absorbing the technological advantages of DeFi (decentralized finance).

As the main competitor of the NYSE, Nasdaq had already applied to the U.S. Securities and Exchange Commission (SEC) in September last year, hoping to allow investors to trade tokenized versions of stocks. In the broader asset management field, JPMorgan, Goldman Sachs, Bank of New York Mellon (BNY Mellon), and State Street have all launched tokenized money market fund projects, allowing clients to hold digital tokens representing fund shares In response to the development of the new platform, Michael Blaugrund, Vice President of Strategic Planning at the Intercontinental Exchange (ICE), clarified: “The new NYSE platform announced on Monday is developed in-house.” He emphasized that although ICE previously invested $2 billion in the crypto prediction platform Polymarket and plans to collaborate in the future, the NYSE's tokenization platform does not involve Polymarket.

According to Barron's, to support this ecosystem, ICE is collaborating with banks including Bank of New York Mellon and Citigroup to support its clearinghouse's tokenized deposit business.

Traditional banking is also following suit. JPMorgan's asset management division launched the first tokenized money market fund last December. Goldman Sachs, Bank of New York Mellon, and others have also announced similar projects aimed at allowing clients to hold digital tokens representing shares of money market funds.

The Dual Game of Efficiency and Regulation

Despite the promising technological prospects, the market still needs to remain cautiously optimistic regarding compliance.

Advocates of the crypto industry have long believed that blockchain technology can simplify corporate financing processes and make market operations more transparent and efficient. However, regulators and some members of Congress remain vigilant about potential fraud risks. Additionally, some crypto companies outside the U.S. have launched tokens tracking popular stocks like Nvidia or Tesla, but these products have been criticized for frequently deviating from the underlying stock prices.

If the NYSE's platform is approved, its greatest significance lies in providing a regulated and compliant tokenized issuance channel for blue-chip companies. This not only responds to the demand from a new generation of investors for around-the-clock market access but also attempts to address the pricing discrepancies and security issues previously associated with offshore tokenized stocks within a regulated framework.

Currently, the NYSE has been in contact with SEC staff regarding the plan, but the specific approval outcome will be key to determining the project's success or failure