The proposed 24/7 token trading venue
The New York Stock Exchange is working on a digital platform intended to enable investors to trade digital tokens around the clock, its owner Intercontinental Exchange said Monday. Intercontinental Exchange said the effort would be developed as a platform separate from the NYSE itself, which operates only on weekdays.
Intercontinental Exchange said the platform is designed to allow instant settlement of transactions and to support orders sized in dollar amounts. The exchange owner also said the platform would rely on stablecoin-based funding.
Tokenization and stablecoins
Tokenization uses blockchain technology to create digital tokens as stand-ins for assets such as stocks, bonds, and real estate, Intercontinental Exchange said. The concept can also apply to fractional ownership of other items that can be traded similarly to cryptocurrency by people anywhere at any time.
The reporting also described stablecoins as a type of cryptocurrency typically bought and sold for $1, and said stablecoins have helped fuel interest in tokenizing other financial assets.
Conditional expansion to a new NYSE venue
Intercontinental Exchange said the platform would, if it meets regulatory scrutiny, power a new NYSE venue that supports trading tokenized versions of company shares. It said the development is part of a broader effort to expand Intercontinental Exchange’s transaction clearing capabilities.
In particular, Intercontinental Exchange said the platform would be aimed at handling 24/7 trading of tokenized securities. The company also said the platform could potentially integrate tokenized collateral.
Lenders and clearinghouses
Intercontinental Exchange said it is working with Citigroup and the Bank of New York Mellon, along with other lenders. The purpose, Intercontinental Exchange said, is to support tokenized deposits across the company’s six clearinghouses around the globe.