Avalanche has been selected to provide the core blockchain ledger technology for the clearing firm supporting the New York Stock Exchange’s upcoming tokenized securities trading platform.
Summary
- NYSE has selected Avalanche to provide the core ledger technology for the clearing firm supporting its upcoming tokenized securities trading platform.
- Avalanche will handle the recording and settlement of transactions, while the proposed venue is designed to support equities issued across multiple blockchain networks.
- The selection follows roughly a year of testing by NYSE, during which the exchange evaluated Avalanche’s technical capabilities, operating costs and compatibility with its existing infrastructure.
- The planned platform will support 24/7 trading and onchain settlement of tokenized securities, subject to regulatory approval.
- NYSE has been working with several technology and transfer agent partners, including Broadridge, Computershare, Equiniti, Securitize and tZERO, to develop the platform.
Ava Labs announced on November 9 that its blockchain infrastructure will support the NYSE-affiliated digital alternative trading system (ATS), which is being developed to allow continuous trading and onchain settlement of tokenized securities.
The platform remains subject to regulatory approval and is designed to operate 24 hours a day, seven days a week, allowing participating investors to trade securities outside conventional stock market hours.
Avalanche will provide the ledger used to record and settle transactions through the platform’s clearing firm, while the trading venue itself will accommodate equities issued across different blockchain networks.
NYSE Head of Digital Issuance Dennis Lee said the exchange had examined several technical requirements before choosing Avalanche for the settlement infrastructure.
According to Lee, the clearing ledger must offer reliable transaction processing, predictable costs and controls over who can participate in the network, while maintaining access to an established developer ecosystem.
“Avalanche meets all those needs,” Lee said.
Avalanche selection follows a year of NYSE testing
The announcement follows roughly a year of technical evaluations and discussions between Ava Labs and NYSE parent Intercontinental Exchange (ICE).
In September, it was reported that NYSE had spent approximately 12 months testing Avalanche technology and examining how it could work alongside the exchange’s existing trading systems.
During the Avalanche Summit in New York, Ava Labs President Charley Cooper explained that NYSE had examined the commercial side of the proposed infrastructure alongside its technical capabilities.
“They weren’t just kicking the tires on our technology,” Cooper said at the time, explaining that the exchange wanted to understand whether Ava Labs could meet its business and economic requirements.
ICE Head of Strategic Initiatives Michael Blaugrund expressed similar views during the event, saying Avalanche satisfied several requirements the company had established while evaluating blockchain providers.
“As we’ve evaluated different platforms, Avalanche checks a lot of those boxes for us,” Blaugrund said.
At the time, neither company had confirmed which blockchain would handle settlement for the planned securities venue.
Ava Labs founder and CEO Emin Gün Sirer said the newly announced arrangement would provide dedicated infrastructure capable of meeting the platform’s operational and regulatory requirements.
He described predictable transaction costs, controlled participation and connectivity with other blockchain-based assets as important features of the system.
How NYSE’s tokenized securities platform will operate
NYSE first announced the proposed platform in January, outlining plans to combine its existing Pillar matching engine with blockchain-based infrastructure for post-trade processing.
The exchange said the system would support tokenized US equities and exchange-traded funds, including securities represented digitally alongside conventional shares and securities issued directly as tokens.
Investors would be able to place orders in dollar amounts, purchase fractional shares and fund transactions using stablecoins.
NYSE said holders of eligible tokenized shares would retain conventional shareholder rights, including dividends and participation in corporate governance.
The proposed venue would provide access through qualified broker-dealers, with the exchange seeking to preserve established securities market requirements within its blockchain-based trading arrangements.
ICE has separately been working with BNY and Citi on tokenized deposits that could help clearing members transfer funds and meet margin requirements outside regular banking hours.
NYSE expands its network of tokenization partners
Avalanche’s selection follows several agreements involving companies responsible for different parts of NYSE’s planned digital securities infrastructure.
On November 2, the exchange added four transfer agents, naming Broadridge Financial Solutions, Computershare, Equiniti and Superstate as partners.
The companies joined Securitize and tZERO, bringing the number of participating transfer-agent firms to six.
Broadridge, Computershare and Equiniti collectively provide services to nearly 5,000 listed companies, including approximately 99% of S&P 500 constituents.
Their responsibilities include maintaining shareholder records, processing ownership changes and supporting corporate actions associated with securities issued or traded through the proposed system.
ICE had previously reached an agreement with tZERO in August covering platform development, blockchain patent licensing and an investment in the company’s financing round.
The exchange operator has been assembling the trading, transfer-agency and settlement components through these separate arrangements as it prepares the digital venue for regulatory review.
