Newsletter

• The New York Stock Exchange will use Avalanche as the core ledger for its planned tokenized securities platform, which will be used for clearing and settlement, but regulatory approval is still required.
• Analysts say that this is a major victory for Avalanche in terms of credibility; an expert pointed out that this decision was made after about a year of testing.
• However, the platform will operate on dedicated infrastructure, rather than on the public C-Chain. Experts warn that this may not necessarily translate into value for AVAX.

The New York Stock Exchange chose Avalanche this week to provide infrastructure for its upcoming tokenized securities platform. Experts say this is of great significance to the reputation of Avalanche, but they also warn that it may not necessarily translate into an increase in the value of the AVAX tokens on that network.

On Monday, Ava Labs announced that Avalanche will serve as the “core ledger technology” for the tokenized securities platform developed by Intercontinental Exchange (Intercontinental Exchange), the parent company of the New York Stock Exchange. This product is aimed at enabling 24/7 trading, clearing, and settlement of tokenized securities, but it still requires regulatory approval.

Research analyst Carlos Guzman from market maker GSR told Decrypt that this is "absolutely a major victory for the project."

He said, "Allowing the New York Stock Exchange to choose its own technology for settlement is an important boost to its institutional credibility, and it also verifies the benefits that blockchain technology can bring to traditional financial infrastructure, such as instant settlement and programmability."

The head of Mercuryo in North America, Luther Maday, told Decrypt that this decision was made after about a year of testing on Avalanche. This indicates that the network has passed the checks in terms of "performance, reliability, and control".

He added, "The New York Stock Exchange has chosen technologies for clearing and settlement, which represents a deeper utilization of blockchain than simply issuing tokenized assets on a certain network."

According to the data from Decrypt, the AVAX token of Avalanche has risen by 3.6% in the past day to reach $8.64. However, experts warn that providing infrastructure does not necessarily mean that the token's value will rise in the long term.

Guzman explained, "The New York Stock Exchange will use the infrastructure of Avalanche for clearing and settlement, so actual transactions will still take place off-chain."

This means that the activities of the New York Stock Exchange will be conducted on the Avalanche dedicated infrastructure, rather than on the public C-Chain where most network activities take place.

Maday said, 'I will cautiously interpret this news as an indication that the publicization of C-Chain activities will increase.'

However, Maday indicates that it is worth paying attention to the specific ways in which the AVAX token is used within the dedicated infrastructure. He also pointed out that the liquidity of stablecoins, the activities of validators, and network transaction fees may all benefit as a result.

The New York Stock Exchange also collaborates with Blockchain.com to sell tokenized stocks and ETF to crypto investors; meanwhile, its parent company ICE is working with OKX to launch a 24-hour trading platform for tokenized stocks under SEC. On the other hand, Morgan Stanley has also begun to tokenize its own securities.

However, not all companies are willing to participate. All seven of the so-called "Big Seven of U.S. Stocks" – including Apple, Meta, etc. – have chosen not to have their stocks tokenized on the OKX-ICE platform, and in addition, dozens of other companies have also decided to withdraw.

Even if tokenization truly becomes widespread in the end, it cannot be guaranteed that AVAX investors will profit from it.

The founder of Symbiotic, and also the founder of the collateral market platform Symbiotic, Misha Putiatin, told Decrypt: “The core issue Avalanche faces is whether it can achieve what other blockchains have always found difficult to do: capturing value. Avalanche has always had a team in this industry that places a great emphasis on results, so I guess they have a plan for this, but it remains to be seen at present.”

Ava Labs did not immediately respond to Decrypt's request for a comment.