In a widely expected development, the New York Stock Exchange (NYSE) has selected AvaLabs and its Avalanche blockchain to provide “core ledger technology” for clearing and settlement of tokenised equities executed on its planned affiliated trading venue, which is expected to go live this year, subject to regulatory approval.
“At the NYSE, we’re looking at how blockchain technology can expand what we offer in equities, and we’re picking the right technology for each job,” says Dennis Lee, Head of Digital Issuance, NYSE. “The upcoming digital trading platform will support equities listed on a range of blockchains, though the ledger that records and settles trades needs to be fast and reliable, let us control who can take part, keep costs predictable, and have a large community of developers behind it. Avalanche meets all those needs.”
Founded in 2018 and headquartered in New York City, Ava Labs has built Avalanche as a high-performance public/private blockchain platform fit to power financial applications. Its public, permissionless and decentralised primary network has been tapped by several asset managers to offer tokenised funds (such as BlackRock’s BUIDL fund).Further, its public network also allows private subnets that are permissioned and have been deployed by the likes of J.P. Morgan, Citi and Goldman Sachs for financial markets and payments applications. As an Ethereum EVM-compatible chain, Avalanche supports token compliance protocols, such as ERC-3643.
“The upcoming tokenised securities platform shows why this model matters for capital markets,” says Emin Gün Sirer, Founder and CEO of Ava Labs. “It will support the platform’s 24/7 atomic settlement needs with dedicated infrastructure with predictable performance and costs, the control to meet its regulatory and operational requirements, and connectivity to a broader ecosystem of assets and liquidity. This approach is what technology built for business looks like, with infrastructure designed to support issuance and settlement on chain at the scale global markets demand.”
The NYSE announced its affiliate venue for tokenised securities in January, when it noted that its proprietary Pillar trading system would be upgraded to support their execution. Its choice of Avalanche as a ledger technology for post-trade operations was signaled in September when Michael Blaugrund, VP of Strategic Initiatives at NYSE’s parent ICE, spoke at Ava Labs Avalanche Summit event and noted that the NYSE had been “looking very carefully” at Avalanche as a platform for the on-chain settlement component of the NYSE’s digital assets solution.
Aside from its trading and settlement systems, the NYSE has also announced partnerships with others as it builds an ecosystem for tokenised trading. That includes Blockchan.com, which is providing market visibility and reach via its network of 44 million verified digital asset wallets across 79+ jurisdictions. The NYSE has also named four companies to act as approved transfer agents for tokenised securities: Broadridge Financial Solutions, Computershare, Equiniti and Superstate.
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