Author: Cookie
On January 19th, official sources announced that the New York Stock Exchange (NYSE), part of the Intercontinental Exchange (ICE) group, revealed plans to develop a platform for trading tokenized securities with on-chain settlement, and will seek regulatory approval for the initiative.
The NYSE's new digital platform aims to support a tokenized trading experience, featuring 7x24 operation, instant settlement, dollar-based order entry, and stablecoin-based fund transfers. Its design integrates the NYSE's Pillar matching engine with a blockchain-based post-trade system, boasting capabilities for multi-chain settlement and custody.
ICE Group President Lynn Martin stated plainly: "We are leading the industry toward a fully on-chain solution while maintaining the NYSE's unparalleled protections and high regulatory standards." In other words, they aim to enhance efficiency with blockchain while continuing to earn Wall Street's trust.
Currently, the plan is in its early development stages, not yet built or fully tested. The NYSE stated it will seek approval from regulators like the U.S. Securities and Exchange Commission (SEC), with an expected platform launch potentially in late 2026.
The initial reaction from crypto enthusiasts might be, "Oh no, the institutional players are making a major move again." The narrative of trading U.S. stocks on-chain seems poised to be completely co-opted. What's left for us then? In reality, the tokenization of traditional securities isn't a new trend born solely from last year's significant progress in crypto compliance; it has existed for some time. A closer look at the past and present of traditional securities tokenization in the U.S. and globally reveals an unstoppable and continuously advancing trend. While anxiety is understandable, there's even more reason for confidence.
In the U.S., the NYSE is Actually Racing Against Nasdaq
Compared to the NYSE's recent preliminary announcement of its tokenization plan, Nasdaq submitted a formal proposal to the SEC last year.
On September 8, 2025, Nasdaq filed proposal SR-NASDAQ-2025-072 with the SEC, aiming to amend rules to allow trading of tokenized securities on Nasdaq markets and integrate blockchain technology for settlement and clearing. The proposal highlights blockchain's potential for faster settlement, improved audit trails, and a smoother order-to-settlement process.
If approved, the functionality is expected to be available by the end of Q3 2026. The proposal is under SEC review, with a revised version (Amendment No. 1) submitted on December 29, 2025.
At first glance, the NYSE appears to be lagging behind Nasdaq. However, the NYSE's new plan isn't a hasty counter to Nasdaq but rather a continuation of ICE's long-term blockchain strategy.
As early as 2015, ICE began exploring blockchain technology, launching the Bakkt platform (focusing on crypto futures and custody) in 2018. In 2021, Bakkt went public on the NYSE via a SPAC merger with VPC Impact Acquisition Holdings.
In August last year, ICE partnered with Chainlink to provide forex and precious metals rate data on-chain. In October, ICE announced a strategic investment of up to $20 billion in Polymarket. Late last year, there were also reports of ICE negotiating an investment in MoonPay.
More notably, the NYSE and Nasdaq are pursuing different approaches to securities tokenization reform.
Nasdaq's proposal adopts a "hybrid model." Traders can choose traditional or tokenized (using blockchain) settlement when entering orders. All trades execute in the same order book, using the same CUSIP identifiers, execution rules, and priority. Clearing and settlement are handled by the DTC, with tokenization serving only as an optional "digital representation" that doesn't alter existing structures (like the T+1 settlement cycle).
In essence, Nasdaq isn't creating a brand-new, independent on-chain securities trading platform. Instead, it's integrating tokenized securities into the existing system, emphasizing compatibility and minimizing disruption to current infrastructure to avoid creating new risks. Although reports in late last year indicated Nasdaq was seeking approval to allow markets to trade 5 days a week, 23 hours a day, it remains a gradual, moderate reform.
The NYSE's approach is clearly more radical. They aim to build a completely new, independent on-chain securities trading platform. ICE is collaborating with banks like BNY Mellon and Citigroup to support tokenized deposits within its clearinghouse. This would help clearing members transfer and manage funds, meet margin obligations outside traditional banking hours, and accommodate funding needs across different jurisdictions and time zones.
This move breaks free from the limitations of traditional banking clearing windows, which are only open on weekdays. For the NYSE, T+0 settlement, 7x24 trading, fractional share trading, and stablecoin support are all on the table—undeniably a more profound transformation compared to Nasdaq.
Globally, exploration into securities tokenization and even broader asset tokenization began long ago and is thriving. Examples include Switzerland's SIX Digital Exchange (SDX), Germany's Deutsche Börse D7 platform, the UK's Archax, and Singapore's DBS Bank Digital Exchange. However, a reform plan as aggressive as the NYSE's remains "unprecedented."
The race between the NYSE and Nasdaq isn't merely about "earning a bit more in fees." It's a proactive move in the new landscape of global competition within the traditional securities trading market. Like Nasdaq, the NYSE's securities trading platform, NYSE Arca, also submitted a proposal to extend trading hours and is awaiting formal approval—and this happened back in 2024.
The London Stock Exchange (LSE) and Asian exchanges (like Tokyo or Hong Kong) are also discussing extending trading hours.
For traditional stock exchanges, extending trading hours isn't as simple as "opening for a few more hours." Exchanges face numerous technical modifications, such as handling closing prices, ex-rights, ex-dividends, and potential network stability challenges. At the securities broker level, upgrades are also required to follow these changes.
Historically, extending trading hours has been a trend that has never stopped alongside technological advancement. Taking the U.S. as an example, in the 1920s-1940s, daily trading hours for securities markets were only about 5 hours. This increased to about 6 hours in the 1950s-1970s, about 6.5 hours in the 1980s-1990s, and reached about 16 hours in the 21st century.
According to Deloitte report data, as of June 2023, foreign holdings of U.S. securities had already reached $26.86 trillion. Among the reasons for extending trading hours, one certainly is to better accommodate and even attract foreign investors.
NYSE executive Kevin Tyrrell stated in a CNBC interview, "Interest in U.S. equities from both retail and institutional investors continues to grow, both in the U.S. and globally. Our proposed 22-hour/5-day (5 days a week, 22 hours a day) extended trading plan is based on numerous conversations with market participants and our own data and analysis. Given the current level of investor demand and the availability of existing market infrastructure, we believe the 22-hour/5-day extended trading plan is the right approach."
For international companies seeking to list, they want access to the world's most liquid U.S. stock market. If either the NYSE or Nasdaq supports 24/7 trading, they would likely prefer the exchange that does, as it's more time-friendly.
Although stock exchanges are aware of the risks and upgrade costs associated with 24/7 trading, the endless, years-old cryptocurrency market's appeal to global users serves as their best "teacher." Whether it's extending trading hours or improving trading and settlement efficiency, embracing investors worldwide is an essential effort. Traditional securities aren't stuck in the "traditional"; they are constantly evolving.
Impact on Traditional Markets
Support for fractional share trading will undoubtedly significantly lower the entry barrier for retail investors once again. A major advantage of cryptocurrencies over traditional stock markets has been that even if Bitcoin reaches $1 million per coin, retail investors can still buy just $10 worth. If the NYSE's vision is ultimately realized, everyone could also buy $10 worth of U.S. stock giants like NVIDIA, Tesla, or Apple.
7x24 trading and T+0 settlement will greatly accelerate the pace of the traditional stock market. On the positive side, settlement risks and cross-timezone friction will be significantly reduced, while investment flexibility and price discovery efficiency will be greatly enhanced.
Risks also exist. These include more intense volatility and increased emotional trading, potential liquidity fragmentation due to a non-stop market, and more opportunities for price manipulation. Especially during the traditional securities market's closed periods, the on-chain environment could become a "playground" more susceptible to "malicious whales" and insider trading.
Due to changes in trading and settlement mechanisms, strategies of traditional institutions and market makers might also enter a phase of competitive upgrades, much like the NYSE and Nasdaq. Faced with more advanced 24/7 information monitoring and automated trading strategies, it's hard to say whether this progress means more opportunities or more brutal competition for retail investors.
Which Crypto Projects Could Benefit?
Although the NYSE announcement mentions "supporting multi-chain settlement and custody," no further details have been revealed on whether this includes public chains like Ethereum or Solana. If it does, it would undoubtedly be a significant positive for their native tokens.
When on-chain stablecoins can directly enter U.S. stock investments through the NYSE's gateway, the probability of another "altcoin season" in the crypto space will likely shrink again in the short term. The reason it's short-term is that the demand for on-chain stablecoins to access U.S. stocks has never been met before. Once the gateway opens, a significant siphon effect is almost certain in the short term.
However, over the years, the crypto space has cultivated a group of investors with distinct characteristics. The overall investment environment in crypto is quite different from the stock market. Whether investors prioritize stability or the dream of 100x or 1000x returns, and how they will choose, warrants longer-term observation.
For crypto projects like AAVE and Compound that provide stablecoin lending, the NYSE's plan is like a "narrative falling from the sky." For projects like Ondo, which previously focused on bringing U.S. stocks on-chain, they may face the pain of transformation.
For the crypto market, it faces an unprecedented challenge from the traditional securities market. For the crypto industry, this represents blockchain technology "gaining another foothold" in traditional finance, marking another milestone in the industry's overall progress.
Does this mean the future of the crypto market is growing dimmer? I believe not. I believe that as the industry progresses overall, the future trend of "tokenizing everything" is unstoppable, and securities are just one part of that "everything." The crypto market will still be a place where miracles happen. Have faith in the future.