The New York Stock Exchange is laying the groundwork for one of the most consequential changes to US equity market infrastructure in decades.
The exchange announced plans to support tokenized securities and enable continuous, 24/7 trading. It’s an attempt to modernize how stocks trade, settle, and absorb information in a global financial system.
If successful, this shift could alter price discovery, settlement risk, liquidity behavior, and investor psychology across US markets.
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What NYSE Is Actually Proposing
NYSE’s plan centers on building a blockchain-based platform capable of supporting tokenized versions of traditional securities, including stocks and ETFs. These tokenized securities would represent real, legally recognized shares, backed one-to-one by the underlying asset and governed by existing US securities laws.
A tokenized share would still represent ownership in a public company, with the same economic and governance rights as a conventional share. The difference lies in how ownership is recorded and how trades settle.
Crucially, NYSE is not replacing the existing market overnight. Tokenized securities are designed to operate alongside traditional shares, with fungibility between formats over time.
So, this is a parallel system, not a forced migration.
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The Current Stock Market Structure Is Showing Its Age
Despite decades of technological progress, US equity markets still rely on a layered structure built for a pre-digital era. Trading, clearing, settlement, and custody are handled by separate entities, each maintaining its own ledger.
This structure introduces several problems. Capital is tied up during settlement windows. Counterparty risk persists until trades fully clear. Reconciliations between intermediaries add cost and operational risk.
Most importantly, markets remain bound by fixed trading hours, even though information flows globally and continuously.
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These frictions are not always visible to retail investors. But they shape volatility, liquidity, and market behavior every day.
Tokenization Changes Everything at the Infrastructure Level
Tokenization targets these inefficiencies directly. By representing securities on a shared digital ledger, ownership updates and settlement can occur in near real time. Trading and settlement no longer need to be separate processes stitched together after the fact.
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This reduces settlement risk because delivery and payment can happen atomically. It also improves capital efficiency, as collateral and cash are no longer locked up waiting for trades to clear.
For institutions, this has balance sheet implications. For the market as a whole, it simplifies post-trade plumbing that has grown increasingly complex.
The key point is that tokenization does not change what a stock is. It changes how the system processes stock ownership.
A tokenized market built for continuous operation changes that dynamic. Trading does not pause for weekends or overnight hours. Price discovery becomes continuous rather than time-boxed.
This has important implications. Today, when earnings, geopolitical events, or macroeconomic data hit outside market hours, price adjustment is delayed and then compressed into sharp moves at the open.
Overall, continuous trading allows prices to adjust incrementally as information spreads, reducing artificial shock points.
Source: https://beincrypto.com/nyse-tokenized-securities-us-stock-market-impact/
