NYSE partners with Blockchain.com on tokenized US stocks

NYSE and Blockchain.com signed a memorandum of understanding on tokenized US-listed stocks and exchange-traded funds. Blockchain.com would distribute the assets through NYSE's planned digital alternative trading system, subject to regulatory approval. The arrangement would extend NYSE's planned tokenized securities offering to Blockchain.com's global customer base. ICE Data Services plans to distribute Blockchain.com's crypto market data and analytics to its clients. Blockchain.com would add certain ICE and NYSE market data feeds to its platform. Reid Noch of TD Securities said the planned tokenized system appears primarily designed for retail trading. Noch pointed to planned 24/7 trading and request-for-quote functionality. He said instant settlement would require little change to existing retail workflows because retail trades are already pre-funded. Noch said weekend trading could affect retail-heavy names and trading around weekend news events. Tanay Ved of Talos said crypto platforms are becoming multi-asset platforms. Ved said traditional assets are adopting a 24/7 programmable structure. Kraken offers xStocks and has partnered with Nasdaq on a separate tokenized equity model. Binance, Coinbase and Robinhood have launched their own approaches to bringing equities onchain. Ved said tokenization models involve trade-offs between ownership and accessibility. The distributed value of the tokenized stock market reached $3.14 billion as of Wednesday. The value rose more than 18% over the past 30 days. The number of holders climbed nearly 72% to 3.87 million, according to RWA.xyz data. The SEC introduced a five-year Innovation Exemption for certain tokenized securities venues less than a week before the partnership. Eligible venues can use permissioned automated market maker liquidity pools without being treated as exchanges under the Exchange Act. The venues must ensure that tokenized stocks carry the same rights and privileges as equivalent traditional shares. Those requirements exclude Kraken's xStocks and Robinhood's Stock Tokens in their current form. Hester Peirce said the exemption covers one specific tokenized securities model. She said other approaches could remain possible outside the framework.