NYSE and Blockchain.com Pact Targets Tokenized Stock Trading for 44M Users

Blockchain.com's users could soon trade tokenized U.S. stocks and ETFs through a preliminary deal signed by the New York Stock Exchange (NYSE) and the crypto firm.

A tokenized stock represents a digital share recorded on a blockchain, a distributed ledger. According to Blockchain.com, the platform has over 44 million verified accounts.

What the NYSE and Blockchain.com Tokenized Stocks Deal Covers

On Wednesday, the two firms disclosed a memorandum of understanding (MOU), a non-binding pact. The deal outlines a path for Blockchain.com users to access the NYSE's digital alternative trading system (ATS), a regulated platform that stops short of being a full exchange.

Trading would commence only upon regulatory approval, the announcement stated.

The agreement also involves data exchange. ICE Data Services, a unit of NYSE parent Intercontinental Exchange (ICE), intends to offer Blockchain.com's crypto market data to its own customers. In exchange, Blockchain.com will display live NYSE and ICE stock prices within its application.

“People shouldn’t be limited in owning stocks based on where they happen to live or the brokerage and information they may or may not have access to,” Peter Smith, CEO of Blockchain.com, said in the release.

Why the NYSE Wants Crypto Users

The NYSE initially unveiled the platform in January. It pledged 24/7 trading, immediate settlement of shares and cash, stablecoin funding (digital dollars), and the ability to buy fractional shares. According to the exchange, token holders would retain dividend payments and voting rights.

Blockchain.com is active in over 70 countries. Lynn Martin, President of NYSE Group, described that global footprint as a 'natural complement' to the system.

The agreement comes one week after the U.S. Securities and Exchange Commission (SEC) issued a five-year exemption for tokenized stocks. The exemption mandates that tokens hold equivalent rights to common shares and prohibits synthetic versions.

Wall Street is also taking note of the trend. This week, Cantor Fitzgerald pointed to 95% upside potential in Securitize, a company that converts stocks into tokens. Meanwhile, the Citi Institute projects a $5.5 trillion base scenario for tokenized assets by 2030.

No launch date was provided by either firm. The immediate next step involves securing regulatory clearance for the NYSE's digital trading venue.