New York Stock Exchange Selects Avalanche for Clearing Ledger on 24/7 Trading Platform
Key Facts
Avalanche will provide the core ledger technology for the clearing infrastructure of an upcoming digital platform linked to the New York Stock Exchange, Ava Labs announced. The platform is designed to enable trading, clearing and settlement 24/7 for its subscribers, subject to applicable regulatory approvals. Avalanche’s announced role is limited to supporting the infrastructure that records and settles trades, while the New York Stock Exchange said the platform will support stocks listed across multiple networks. Dennis Lee, head of digital asset issuance at the New York Stock Exchange, said a trading and settlement ledger needs speed, reliability, predictable costs and the ability to control participation. He added that "Avalanche meets all these needs."
The announced design combines the New York Stock Exchange’s "Pillar" matching engine with blockchain-based post-trade systems. It enables support for multiple chains for settlement and custody, in line with the exchange’s aim to list stocks on different networks. Planned features include round-the-clock operation, instant settlement, dollar-denominated limit orders and stablecoin funding. The exchange said tokens held by third-party custodians and issuer-sponsored tokenized securities will be interchangeable with traditional shares. It added that holders of tokenized shares will have the same dividend and governance rights as other shareholders.
The New York Stock Exchange is also building a network of transfer agents and ownership records linked to the platform. On November 2, it announced the addition of 4 companies to its partners in this area: Broadridge, Computershare, Equiniti and Superstate, following earlier agreements with Securities and "tZERO." The exchange said Computershare, Equiniti and Broadridge collectively serve nearly 5,000 listed companies. The service base includes about 99% of S&P 500 companies, according to the exchange. These partnerships place issuer records and ownership transfers within the operational infrastructure the exchange is preparing, while Ava Labs’ announcement focuses on the clearing and settlement ledger.
The project comes as the U.S. Securities and Exchange Commission has approved a temporary, conditional framework for certain tokenized stock trading platforms. On September 17, the SEC issued an exemption for eligible platforms trading tokenized NMS stocks through automated market makers and permissioned liquidity pools, and requested public comment. The order sets limits on the number of tokens and trading volume, and requires token holders to have the same rights and privileges as holders of the equivalent stock. It also requires the platform to halt trading in a token if trading in the underlying stock is halted on its primary listing exchange. Smart contracts must be public, auditable and published on a public, permissionless distributed ledger. The framework does not establish that the upcoming New York Stock Exchange platform has received an exemption or operational approval.
The exemptions expire 5 years after publication of the order, according to the SEC. Canton Strategic Holdings provided an example of tokenized stock trading under this framework, saying in an official filing that the first trades in its issuer-sponsored tokenized common stock were executed on November 4 through a permissioned pool on "Tradecraft." It said the trades were atomically settled on the Canton network between Five North and "DRW Cumberland," with "Flowdesk" as the liquidity provider. The company said its registered transfer agent, Vermint, recorded the shares as tokens and maintains the official ownership record on the network. Holdings and trading were limited to individuals with identities and wallets verified and approved by the transfer agent, with identity verification and sanctions screening requirements. The case shows trades being executed under a limited framework, while operation of the proposed New York Stock Exchange platform remains subject to regulatory approvals.
Avalanche’s "AVAX" token closed at $8.656 on November 9, compared with a close of $7.936 in the previous session. Regarding the platform’s timeline, two officials at the New York Stock Exchange and its parent company, Intercontinental Exchange, said in an interview published in February that the project aims to create a digital market operating around the clock. John Herrick, an official at the New York Stock Exchange, said work included a prototype combining a private blockchain application with the "Pillar" matching engine. He said cooperation with the SEC, the Financial Industry Regulatory Authority and other regulators partly affects the pace of progress. Ava Labs’ announcement did not specify when the platform would begin operating.