NYSE picks Avalanche for tokenised share settlement
Ava Labs blockchain chosen as core ledger for clearing firm of planned 24/7 trading venue
The blockchain Avalanche will provide the core ledger technology for clearing and settlement on a planned tokenised securities trading platform being developed by an affiliate of the New York Stock Exchange (NYSE).
Ava Labs, the company that builds Avalanche, said on Monday 9 November that the blockchain would support the clearing firm for the NYSE affiliate’s upcoming alternative trading system (ATS). An ATS is a trading venue regulated as a broker-dealer rather than as an exchange.
Subject to regulatory approval, the platform is designed to allow 24/7 trading, clearing and settlement of tokenised securities for its subscribers. NYSE first announced the platform on Monday 19 January, saying it would combine its Pillar matching engine with blockchain-based post-trade systems capable of supporting multiple blockchains for settlement and custody.
The venue is intended to support both tokenised shares that are fungible with traditionally issued securities and natively issued digital securities, with tokenised shareholders keeping dividend and governance rights.
Dennis Lee, head of digital issuance at NYSE, said the platform would support equities listed on a range of blockchains, but that the ledger recording and settling trades had different requirements.
“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,” he said. “Avalanche meets all those needs.”
Emin Gün Sirer, chief executive and founder of Ava Labs, said the infrastructure would support the platform’s 24/7 atomic settlement needs, meaning cash and securities change hands simultaneously.
“The upcoming tokenised securities platform shows why this model matters for capital markets,” he added.
Ava Labs said blockchain work in capital markets had so far focused largely on individual products such as tokenised funds, pilots and single issuances. It said this project would use blockchain for the infrastructure on which products are issued, traded and settled.
The platform forms part of a wider strategy at NYSE owner Intercontinental Exchange (ICE), which is preparing its clearing houses for 24/7 trading and working with BNY and Citi on tokenised deposits.