The New York Stock Exchange (NYSE) plans to use the Avalanche ($AVAX) network as the core ledger for clearing and settling trades on its upcoming tokenized stock trading platform, a move that places the blockchain at the center of Wall Street's push to bring equities onchain.

According to a Monday press release, Avalanche will provide the ledger technology to the clearing firm supporting the NYSE-affiliated alternative trading system (ATS) now in development, a type of SEC-regulated venue that brings together buyers and sellers outside the traditional exchange framework. The venue intends to offer around-the-clock trading and settlement, pending regulatory approval — the step that will determine when the platform can go live.

Avalanche will not be the only blockchain involved. The platform is designed to accommodate stocks issued across a range of networks, while trades are recorded and settled on Avalanche, the press release said.

"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," Dennis Lee, head of digital issuance at NYSE, said in a statement.

Lee added that the exchange sought a settlement ledger capable of processing transactions quickly, keeping costs predictable and controlling who could participate.

$AVAX, the native token of the Avalanche network, rallied on the news and was up 8% over the past 24 hours.

Wall Street's tokenization race

The Avalanche deal adds another piece to the NYSE's tokenized securities plans as Wall Street firms race to build out their blockchain-based infrastructure.

Last week, the exchange expanded its network of transfer agents to six firms, adding Broadridge Financial Solutions (BR), Computershare, Equiniti and Superstate to existing partners Securitize (SECZ) and tZERO. Equiniti is in an acquisition deal with Bullish, the parent company of CoinDesk.

The NYSE is not seeking to move every part of stock trading onto a single blockchain. Its planned platform will pair the exchange's Pillar trading engine with blockchain-based clearing, settlement and custody, aiming to enable 24/7 trading, instant settlement and stablecoin-based funding. Stablecoins are cryptocurrencies designed to hold a steady value against traditional currencies, and instant settlement would mark a departure from the U.S. equities market's current T+1 cycle, in which most trades settle one business day after execution.

Rival Nasdaq is also developing tokenized stock infrastructure, including a partnership with the parent company of crypto exchange Kraken to distribute blockchain-based shares globally.

Meanwhile, the Depository Trust & Clearing Corporation (DTCC), which sits at the center of U.S. securities custody and settlement, launched a tokenization service last month using its private Besu blockchain and the Canton Network. Unlike the exchange projects, DTCC's service focuses on custody and transfers rather than operating a trading venue.

Another approach is emerging through the Securities and Exchange Commission's (SEC) innovation exemption, which opens a path for select blockchain-based venues to trade tokenized stocks through automated market makers, with issuers able to opt out. One such project involves crypto exchange OKX and Intercontinental Exchange (ICE), the NYSE's parent company. That venue is separate from the NYSE-affiliated tokenized stock platform.

Source: CoinDesk