NYSE Ponders Continuous Trading with Tokenized Securities

The New York Stock Exchange (NYSE) is planning to launch a tokenized securities venue that will allow for continuous trading and settlement, potentially operating 24 hours a day, seven days a week. The project aims to move away from traditional trading sessions and T+1 settlement, which can leave counterparties exposed to each other for an extended period.

Avalanche has emerged as a potential infrastructure candidate for the NYSE's platform, with Michael Blaugrund, vice president of strategic initiatives at Intercontinental Exchange (ICE), stating that Avalanche 'checks a lot of those boxes' for ICE. However, regulatory approval remains a key dependency for the project.

The proposed architecture would use blockchain-based settlement to compress the interval between trade execution and final exchange of securities and cash. This could potentially reduce the period during which counterparties have unsettled exposure to each other.

However, the NYSE faces a liquidity problem outside traditional market hours, with concentrated liquidity in established sessions making it challenging to maintain efficient prices overnight and on weekends.