Avalanche will supply the core ledger for clearing and settling trades on the New York Stock Exchange’s planned tokenized securities platform, Ava Labs said in a press release on Monday. The NYSE-affiliated alternative trading system, a tokenized stock venue designed for round-the-clock trading and settlement, still needs regulatory approval. Ava Labs later told CoinDesk that the NYSE will run its own custom chain built on Avalanche technology rather than settle on the public network, which leaves open how much the deal does for the AVAX token.
What Ava Labs and the NYSE said
According to the release, Avalanche will provide “the core ledger technology to the platform’s clearing firm.” That clearing firm is not named. Subject to approvals, the platform is “designed to allow 24/7 trading, clearing and settlement for the platform’s subscribers.”
Dennis Lee, head of digital issuance at the NYSE, explained why the exchange split the job. “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,” he said in the release.
Ava Labs chief executive Emin Gün Sirer said the platform would get “dedicated infrastructure with predictable performance and costs” and “the control to meet its regulatory and operational requirements.”
Press reports went further than the release. CoinDesk reported that the NYSE will settle tokenized stocks on the platform “exclusively” on Avalanche and is “targeting a Q4 launch pending regulatory approval,” and The Wall Street Journal carried the same exclusivity and fourth-quarter details. The Ava Labs release and Avalanche’s own blog post do not use the word exclusive and give no launch date.
Where Avalanche fits in the NYSE plan
The exchange first set out the project in January. The NYSE said on Jan. 19, in a release published by parent Intercontinental Exchange, that the venue would pair the NYSE’s Pillar matching engine with blockchain-based post-trade systems, including “the capability to support multiple chains for settlement and custody.” It promised 24/7 operations, instant settlement, orders sized in dollar amounts and stablecoin funding. Tokenized shares are meant to be fungible with conventionally issued stock and carry the same dividends and voting rights.
The issuance side has filled in quickly. On Nov. 2 the NYSE added Broadridge, Computershare, Equiniti and Superstate to existing transfer agent partners Securitize and tZERO, bringing the group to six. The exchange said Computershare, Equiniti and Broadridge together serve close to 5,000 listed companies, including nearly 99% of the S&P 500.
Monday’s announcement covers the other end of the trade. Transfer agents can mint shares on different blockchains, while trades on the NYSE venue are recorded and settled on an Avalanche-based ledger used by the clearing firm. The project is separate from OKXICE, the tokenized stock venue that ICE is building with OKX, where a growing list of issuers has objected to having their shares listed.
What it means for AVAX
Traders did not wait for the details. On Coinbase, AVAX traded at about $8.10 at 12:30 UTC and was above $8.50 within minutes, roughly half an hour before the release went out at 13:00 UTC. Reports of the plan were already spreading on crypto social media before the official word. By 14:05 UTC it was near $8.88, up close to 10% on the move. The token topped $9.00 briefly around 16:00 UTC, then eased to about $8.64 by 18:00 UTC, still roughly 7% above its level before the jump.
The link between the deal and the token is less clear than the price reaction suggests. John Nahas, chief business officer at Ava Labs, told CoinDesk that the NYSE will operate its own custom blockchain built on Avalanche’s technology and tailored to the platform’s regulatory needs, rather than use Avalanche’s public blockchain for settlement. “This has been over a year in the making,” he said. That matches Lee’s emphasis on controlling “who can take part” and Sirer’s reference to “dedicated infrastructure.” Avalanche’s blog post says the NYSE “can build infrastructure around the requirements of its market” and that “a customer may never know that Avalanche is there.” None of the statements say whether fees on that chain are paid in AVAX or how much activity would reach the public network.
What the deal does give Avalanche is a reference customer. The same blog post lists BlackRock’s BUIDL fund and products from Franklin Templeton, Apollo and KKR as already available on the network.
What to watch
Three open questions remain: regulators’ sign-off on the trading system, the identity of the clearing firm, and whether the reported fourth-quarter target holds. The bigger test for the token is whether trading volume on the NYSE ledger feeds any demand for AVAX itself, which Monday’s announcements do not address.
FAQ
Will NYSE-listed stocks trade on Avalanche?
Not exactly. Tokenized shares can be issued on several blockchains through the NYSE’s transfer agents. Avalanche provides the ledger that records and settles trades on the planned NYSE-affiliated venue.
When does the platform launch?
The official releases give no date and say the venue needs regulatory approval. CoinDesk reported a fourth-quarter target.
Is this the same as the OKX and ICE venue?
No. OKXICE is a separate joint venture between OKX and NYSE owner ICE. Monday’s announcement covers the NYSE-affiliated trading system.
Disclaimer: This article is for informational purposes only and does not constitute financial advice.
