Overview
- A memorandum announced Wednesday between NYSE Group and crypto brokerage Blockchain.com commits the firms to explore selling blockchain-based tokens that represent or are pegged to U.S.-listed stocks and ETFs through the NYSE’s planned digital alternative trading system.
- The deal includes a data arrangement with Intercontinental Exchange in which ICE will distribute Blockchain.com’s crypto market data and Blockchain.com will embed NYSE and ICE feeds in its platform for its users.
- If regulators approve the plan and the digital ATS is built as described, token trades would be settled on blockchain rails and the firms say eligible tokenized securities could preserve the underlying security and shareholder actions, though those outcomes are not guaranteed.
- Tokenized stock offerings raise investor-protection questions because many existing token products do not convey formal shareholder rights, and the SEC’s recent exemption for tokenized securities has changed the rules that platforms must follow.
- Proponents say tokenized shares could widen access, enable fractional ownership and support near round-the-clock trading, but the collaboration leaves open which countries and customer groups will be served and how rights and protections will be enforced.