- Key insight: The growing street cred of stablecoins is inspiring companies to offer 24/7, on-chain trading of tokenized securities.
- What’s at stake: Market incumbents risk disintermediation if legacy systems can’t support on-chain settlement.
- Forward look: In 2026, major will start launching on-chain trading.
Two of the oldest and largest traditional providers of stock trading infrastructure, the New York Stock Exchange and the Depository Trust & Clearing Corp, are developing platforms to allow 24/7 trading on a blockchain.
These initiatives come as stablecoins are becoming more integrated into the traditional financial system and as support in Washington for blockchain networks and technology advances have made tokenizing and trading digital assets more feasible.
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Up until recently, there’s been a lack of a viable on-chain payment asset that is the counterparty to tokenized assets, Sabih Behzad, head of digital assets and currencies transformation, said during a recent
“So for sure, we tokenized a bond,” he said. “But then guess what? You had to use the fiat method of settling it. So it was a T+5 or T+2 — depending which jurisdiction you’re in— process, and all of the asset servicing, coupon payments, etc, all work the same way as they did previously.” Lack of settlement infrastructure almost defeated the purpose, he said.
“This coming year is a big one for tokenized securities,” Paul Brody, global blockchain leader at EY, told American Banker. “NYSE, Nasdaq and DTCC are basically closing the gap between the current reality of on-chain tokenized securities and what is really possible.”
Though several fintech-hosted distributed ledgers designed for trading tokenized securities already exist, “current offerings are very basic and, in most cases, they cannot match traditional off-chain offerings,” Brody said. “For example, most tokenized securities [platforms] do not transfer dividends, they do not properly track withholding taxes, and they do not give owners voting rights. They also often come with restricted trading hours or reduced liquidity at nights and weekends and, of course, no privacy controls.”
The new generation of blockchain-based securities trading from providers like DTCC and NYSE will have more of the features found on existing exchanges, he said, like dividends and voting rights. For users, they will provide lower trading costs and the ability to earn incremental return on digital assets.
The new platforms
The platform NYSE is building will allow 24/7 trading of U.S. listed equities and ETFs, as well as fractional share trading and immediate on-chain settlement. Once the platform is built, the company will seek regulatory approvals.
NYSE’s platform will combine the exchange’s existing Pillar matching engine with blockchain-based post-trade systems for settlement and custody. On the new platform, orders will be priced in dollars and stablecoins will be used for funding.
The NYSE platform will support traditionally-issued securities alongside tokens issued as digital securities. Tokenized shareholders will participate in traditional shareholder dividends and governance rights, the company said.
NYSE’s owner, Intercontinental Exchange, has a broader digital strategy that includes the ability to support 24/7 trading and potentially integrate tokenized collateral. ICE is working with banks including BNY 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 over different jurisdictions and time zones.
“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,” said Lynn Martin, president of NYSE Group, in a statement. “Harnessing our expertise to reinvent market infrastructure is how we’ll meet and shape the demands of a digital future.”
In early December, the DTCC received a no-action letter from the Securities and Exchange Commission that allows it to offer a new service that will tokenize real-world assets on pre-approved blockchains for three years. It aims to roll this out in the second half of this year.
Under the no-action letter, the DTCC will be allowed to provide the same entitlements, investor protections and ownership rights on tokenized securities as it does traditional ones.
“Tokenizing the U.S. securities market has the potential to yield transformational benefits such as collateral mobility, new trading modalities, 24/7 access and programmable assets, but this will only be achievable if market infrastructure provides a robust foundation to usher in this new digital era,” said Frank La Salla, president and CEO of the DTCC, in a statement.
Stock exchanges have looked to distributed ledger technology — often conflated with blockchains — for years, with the hope that the technology will make trading more efficient and transparent. In 2016, the Australian Securities Exchange announced that it would replace its dated post-trade system, called Clearing House Electronic Subregister System or CHESS, with a distributed ledger built by Digital Asset Holdings (the company’s name has since been changed to Digital Assets). Seven years later, ASX dropped the project, “citing dysfunctional management, concerns about the product’s complexity and scalability, and difficulty finding experts to support it,” according to Reuters. The ASX is now working with TCS on a new settlement platform.
But distributed ledger technology has changed a lot in recent years, and layers of protocols have been built that make blockchains capable of handling the speed, volume, privacy and other needs of digital asset trading.
“Over time, the result is going to be that the bulk of trading and ownership goes on chain,” Brody said. “That won’t happen right away, but 2026 is going to be the year when I think we get to parity and it’s going to come from the entities at the center of this ecosystem putting their weight behind solving these problems.”