NYSE Has Spent a Year Evaluating Avalanche for Its Tokenized Securities Platform
Key Takeaways
- •NYSE has tested Avalanche's blockchain for approximately 12 months as a candidate technology for its initiative to tokenize American equities and ETFs, according to Ava Labs President Charley Cooper.
- •The evaluation went beyond technical assessments, with NYSE executives also examining Ava Labs' business strategy and its understanding of the commercial needs of a major exchange.
- •ICE's Head of Strategic Initiatives, Michael Blaugrund, said Avalanche satisfied numerous ICE criteria, though NYSE has not confirmed any blockchain selection and its architecture is designed to support multiple networks.
- •Under NYSE's plan announced in January, the exchange's Pillar matching engine would remain the core trading system while blockchain infrastructure handles post-trade settlement and custody, subject to regulatory authorization.
- •An SEC innovation exemption announced Thursday permits certain types of blockchain-based trading for tokenized equities, and Cooper suggested some platforms could introduce 24-hour weekday trading within the coming year.
The New York Stock Exchange has spent approximately one year evaluating Avalanche's blockchain technology as part of its initiative to tokenize American stocks and exchange-traded funds, according to Ava Labs President Charley Cooper.
Cooper disclosed details of the ongoing testing during Thursday's Avalanche Summit held in New York, saying the exchange has been analyzing how Avalanche's technology could integrate seamlessly with NYSE's current operational infrastructure over the past 12 months.
The evaluation extended well beyond purely technical assessments. Cooper noted that NYSE executives also probed Ava Labs on its business strategy and the company's comprehension of the commercial requirements facing a premier financial exchange. The breadth of the review underscores the operational and commercial scrutiny involved in attaching blockchain infrastructure to the core systems of a major exchange.
Intercontinental Exchange Assesses Avalanche Technology
Cooper characterized the working relationship between Ava Labs — the developer of the Avalanche blockchain — and Intercontinental Exchange, NYSE's parent organization, as collaborative and engaged. However, he stopped short of declaring that Avalanche had been chosen for the tokenization initiative.
Michael Blaugrund, ICE's Head of Strategic Initiatives, also addressed the partnership during the Avalanche Summit proceedings. Blaugrund confirmed ICE's substantial engagement with the Avalanche development team throughout the blockchain platform evaluation process, noting that Avalanche satisfied numerous criteria that ICE had established for consideration.
NYSE initially unveiled its tokenized securities strategy in January, detailing plans for a platform enabling trading and blockchain-based settlement of American equities and ETFs. The envisioned system requires regulatory authorization before implementation.
Under the plan, NYSE intends to integrate its existing Pillar matching engine, the system that pairs buy and sell orders, with blockchain infrastructure that would manage post-trade processes. The architecture being developed is designed to accommodate multiple blockchain networks for settlement and custody operations — a multi-chain approach that positions Avalanche as one candidate technology under consideration rather than a finalized selection.
In August, ICE revealed a separate partnership with tZERO, a blockchain-based trading technology firm, appointing the firm as a design partner for building infrastructure to support the planned NYSE-connected tokenized securities marketplace. ICE has yet to publicly disclose which blockchain network or networks will ultimately power the platform.
Blockchain Innovation Enters Traditional Equity Market Systems
Tokenization enables conventional financial instruments such as corporate equities to be represented and transferred using blockchain-based infrastructure. NYSE's approach would implement the technology for American stocks and ETFs while maintaining its proven trading engine as the system's core component.
Cooper also explored the potential for extended trading hours for tokenized securities. He suggested that certain platforms might introduce 24-hour weekday trading schedules within the coming year, while acknowledging uncertainty over whether major exchanges such as NYSE, the London Stock Exchange, or CME would be among the first venues to implement such extended hours. Blockchain networks operate continuously rather than in fixed daily sessions, a characteristic frequently cited in discussions of around-the-clock trading for tokenized assets.
Cooper additionally referenced a Securities and Exchange Commission innovation exemption announced Thursday, which he indicated authorizes specific types of blockchain-based trading for tokenized equities. Exemptions of this kind are generally intended to allow firms to trial novel products and services while remaining under regulatory oversight.
At present, ICE remains in an evaluation phase with blockchain technology providers while collaborating with tZERO on comprehensive platform architecture. Avalanche has completed a year-long testing period, though NYSE has not issued confirmation that the will be deployed for its tokenized securities platform.
This article is based on reporting by Blockonomi.
