NYSE Taps Avalanche to Settle Its Planned Tokenized Stock Platform

The New York Stock Exchange is turning to Avalanche to power the behind-the-scenes plumbing of its forthcoming tokenized securities platform, one of the clearest signs yet that Wall Street's oldest institutions are moving core market infrastructure onto public blockchains.

Ava Labs, the company behind Avalanche, said Monday that the blockchain will serve as the "core ledger technology" for the clearing firm behind an NYSE-affiliated digital trading venue.

The platform, which the NYSE's parent Intercontinental Exchange previously said it was developing, is designed to allow 24/7 trading, clearing and settlement of tokenized securities, subject to regulatory approval.

Market Infrastructure Shift

Tokenization, the practice of issuing traditional assets as blockchain-based tokens, has become one of Wall Street's buzziest pursuits, but most efforts so far have centered on individual products rather than the market machinery itself.

The NYSE's move is notable because it puts a blockchain underneath the clearing and settlement layer, the plumbing that finalizes trades, rather than just wrapping a single fund or stock in a token.

Wall Street Tokenization Race

The announcement adds to a frenetic race to put stocks and their underlying infrastructure onchain. The NYSE separately tapped Blockchain.com to reach crypto investors with tokenized stocks and ETFs, while ICE and crypto exchange OKX are planning a 24/7 tokenized stock venue under an SEC exemption.

That OKX-ICE effort has hit friction though: Every Magnificent Seven stock, including Apple and Meta, opted out of having its shares tokenized on the venue, with 67 companies in all joining them.

Research shows the appetite for tokenized stocks is real but uneven. An IMF study found tokenized stocks show genuine demand yet remain volatile and illiquid, a reminder that the infrastructure may be arriving faster than the markets to fill it.