The drive to automate and accelerate every working component of our world economy took one step further forward this week. News is circulating of Intercontinental Exchange, the organization that holds ownership of the New York Stock Exchange, now developing a blockchain platform designed to enable round-the-clock trading of tokenized U.S. stocks and electronic fund transfers (ETFs).
As keen digital investors will know, tokenized stocks are digital representations of shares of companies that exist on a blockchain, the decentralized, immutable ledger of digital transactions.
Why Tokenized Stocks Appeal
Because tokenized stocks work as digital certificates stored in a crypto wallet, they mirror the price and value of the underlying stock, but they can be traded at any time of the day or night, even when the NYSE or Nasdaq has closed. Tokenized stocks also appeal because they offer options for “fractional ownership” so that individuals can purchase just a small fraction of a share (think: the price of a beer, rather than thousands of dollars) and also offer instant settlement, rather than a couple of days as might be normal in traditional stock trades.
Intercontinental Exchange (NYSE: ICE) is working to combine NYSE’s order-matching systems with private blockchains to create user features such as dollar-sized orders, stablecoin funding and fractional ownership. New techniques in stablecoin funding are also important. It involves raising capital by issuing digital tokens that will maintain a stable value by virtue of the fact that they are pegged to flat currencies. The stabilization in stablecoin funding comes from algorithmic logic that enables predictable transactions with reduced volatility.
Keen to cash (digitally, or otherwise) in on a more always-on market, Intercontinental Exchange is approaching these developments to serve global demand outside of regular trading hours.
Trading Floors, Electronic Books… Now Blockchain
“Since its founding, ICE has propelled markets from analog to digital,” said Michael Blaugrund, vice president of strategic initiatives, ICE. “Supporting tokenized securities is a pivotal step in ICE’s strategy to operate on-chain market infrastructure for trading, settlement, custody and capital formation in the new era of global finance.”
Blaugrund explains the technology progression here as a natural evolution that has seen traders move through the trading floor era, onward to the use of electronic books… and now ultimately to embrace blockchain.
The design of the new service combines the NYSE’s “pillar matching engine” (an algorithm aligning entities with predefined strategic pillars) with blockchain-based post-trade systems, including the capability to support multiple chains for settlement and custody.
The launch of the NYSE’s tokenized securities platform is one component of ICE’s broader digital strategy, which includes preparing its clearing infrastructure to support 24/7 trading and the potential integration of tokenized collateral.
Banking On Bank Backing
ICE is now working with banks, including Bank of New York Mellon and Citi, to support tokenized deposits across ICE’s clearinghouses to help clearing members transfer and manage money outside of traditional banking hours, meet margin obligations and accommodate funding requirements across different jurisdictions and time zones.
“For more than two centuries, the NYSE has transformed the way markets operate,” said Lynn Martin, president, NYSE Group. “We are leading the industry toward fully on-chain solutions, grounded in the unmatched protections and high regulatory standards that position us to marry trust with state-of-the-art technology. Harnessing our expertise to reinvent market infrastructure is how we’ll meet and shape the demands of a digital future.”
Intercontinental Exchange is the operator of six clearing houses around the world, including the world’s largest energy clearing house and the world’s largest clearing house for credit default swaps.
The launch of the blockchain platform designed is planned for later this year in 2026.
