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Some places never close — casinos, convenience stores, Waffle Houses — and soon, the New York Stock Exchange might join them.
NYSE and its parent company, Intercontinental Exchange, are developing a blockchain-based platform that would allow 24/7 trading of tokenized US equities and ETFs, pending regulatory approval. “Supporting tokenized securities is a pivotal step in ICE’s strategy to operate on-chain market infrastructure for trading, settlement, custody and capital formation in the new era of global finance,” Michael Blaugrund, ICE’s vice president of strategic initiatives, said in a statement.
The move could fundamentally change how trading works, but it’s not yet clear whether it will offer a real advantage or just endless hours of marginal activity, like streaming services with thousands of shows when all we really want to watch is NCIS and Bluey.
Building Blockchain
Tokenized securities are digital representations of traditional assets — stocks, ETFs, real estate, commodities and more. They promise faster trade execution and greater liquidity. As of last fall, roughly $24 billion in real-world assets were tokenized on blockchains. Analysts expect that to surge, with British multinational bank Standard Chartered projecting $30 trillion in tokenized assets by 2034.
A handful of firms are leading the charge to create them:
- BlackRock, WisdomTree and Franklin Templeton have begun tokenizing money market funds and mutual funds.
- Meanwhile, platforms like Robinhood and Kraken have tokenized hundreds of US stocks and ETFs for foreign investors.
Time is Never Time At All: In addition to the token platform, NYSE plans to operate Arca, its fully electronic exchange, 22 hours a day on weekdays. Nasdaq, meanwhile, is seeking regulatory approval for 23-hour trading with a short maintenance pause.
However, most activity will probably still occur during regular hours, and FINRA warns of lower liquidity and higher volatility outside normal sessions. The World Economic Forum says questions remain, including, “How will daily volume be measured?” and “What defines opening or closing prices?”
Lucas Wennersten, founder of 49th Parallel Wealth Management, said tokens and extended trading hours could bring benefits such as more products and lower costs. But he also warned of downsides. “Tokenized assets could prove harder to regulate, increasing fraud, money laundering, terrorism financing, and other illicit activities,” he told Advisor Upside, adding that unlimited trading hours could render safeguards like circuit breakers ineffective.
