The New York Stock Exchange (ICE) is working with tokenization specialist Securitize to help design the infrastructure behind tokenized securities trading, according to a press release shared with CoinDesk on Tuesday.
Securitize plans to go public this year through a SPAC deal with Cantor Equitize Partners (CEPT). CEPT shares rose 6% pre-market. ICE shares were flat.
The two companies signed a memorandum of understanding to build the New York Stock Exchange’s planned digital trading platform. Securitize will serve as a design partner, focusing on how transfer agents (the entities that track ownership and process corporate actions) operate when securities are issued and settled on a blockchain rail.
Securitize, which is backed by major asset managers such as BlackRock and Ark Invest and is registered as a transfer agent with the SEC, is expected to be one of the first companies eligible to mint tokenized versions of stocks and ETFs on the platform, subject to regulatory approval.
The company’s broker-dealer arm can also participate in trading, giving it a foothold in both issuances and market activity.
The move comes as traditional exchange giants such as the New York Stock Exchange and Nasdaq are redoubling their efforts to bring blockchain to stock trading. The technology will enable round-the-clock trading and near-instant settlement, similar to cryptocurrency markets.
Recently, New York Stock Exchange parent company Intercontinental Exchange invested in cryptocurrency exchange OKX to develop tokenized stocks and derivatives products. Rival Nasdaq exchange has received regulatory approval for its tokenized stock trading framework and has leveraged Kraken to distribute stock tokens globally.
“As we explore how tokenization can enhance capital markets, it is critical that new infrastructure is developed in a way that maintains the trust, transparency and protection that investors expect,” said Lynn Martin, president of NYSE Group.
Read more: Here’s why Nasdaq and NYSE owners are putting the $126 trillion stock market on the blockchain