Author: Crypto Salad

On February 3, Ondo Finance, a tokenized real-world asset platform, announced the launch of its "Ondo Global Listing" service, claiming that it can bring US stocks onto the blockchain in a "near-real-time" manner during their IPO listing, enabling them to be traded on major blockchains on the first day of listing.

This move not only attempts to eliminate the "IPO time lag" between Wall Street and the crypto world, but also demonstrates its ambition to transform from an "intermediary" to a "digital underwriter" by leveraging its assets under management of over $2.5 billion and cumulative transaction volume of $9 billion.

However, no matter how high-profile or transformative Ondo is, it's merely a "downstream breakthrough" initiated by a native crypto protocol. The true upper limit of the tokenization wave in the US stock market remains the traditional infrastructure giants. On January 19, 2026, the New York Stock Exchange officially announced that it was developing a platform for tokenized securities trading and on-chain settlement, and would apply for necessary regulatory approvals for the platform.

This news sparked considerable discussion in both the traditional financial sector and the crypto industry, but most people simplified it to one sentence: "The NYSE is going to tokenize US stocks." This statement is certainly correct, but it is far from sufficient. If we simply understand this as "putting stocks on the blockchain" or "traditional finance moving closer to Web3," we have not seen the essence. The NYSE's move is actually a well-thought-out institutional revolution.

CryptoSalt aims to begin with this news story and provide a comprehensive and systematic overview of the current development of tokenization in the US stock market. This article, the first in a series, will specifically discuss what this major news story entails and its potential impact on traditional industries within the US stock market.

I. What exactly did the NYSE news say?

Based on the information officially announced by the NYSE, the NYSE is not simply labeling stocks as "tokens." Its core focus is not on a specific product, but on the complete dismantling and restructuring of the entire securities trading system. We have identified four key changes, summarized below:

(1) 7×24-hour trading

24/7 trading is a long-standing and core difference between the crypto financial market and traditional financial markets. However, the NYSE's 24/7 trading strategy isn't simply about extending trading hours; it explicitly focuses on "post-trade infrastructure." It aims to create a new digital platform that integrates the existing Pillar matching engine with a blockchain-based post-trade system, thereby enabling the continuous operation of the "trading, settlement, and custody" chain. In short, the NYSE seeks to create new technologies and institutional arrangements that allow the settlement system itself to adapt to continuous operation.

The reason why traditional securities markets have long maintained fixed trading hours is primarily because various procedures, such as settlement and fund transfers, are highly dependent on bank operating hours and clearing windows. The NYSE has proposed using on-chain or tokenized funding tools to cover "funding gaps outside of business hours," thereby activating the "night/weekend" market closure periods.

Whether 24/7 trading is good or bad for financial markets and retail investors is a question that CryptoShadow believes should be carefully considered. However, for the US stock market itself, the benefits certainly outweigh the drawbacks. After all, as the world's most core asset pool, if the trading hours of US stocks remain fixed domestically, they cannot further develop into a more globalized asset liquidity platform.

(2) Instant settlement of stablecoins

As mentioned earlier, the NYSE hopes to extend trading hours using new "on-chain or tokenized funding instruments." One of the most crucial tools in this regard is the settlement instrument.

The NYSE's official press release used the terms "instant settlement" and "stablecoin-based funding," and explicitly stated that the platform will use a "blockchain-based post-trade system" to achieve on-chain settlement. Here, we need to grasp two key points:

First, the NYSE is not proposing such a basic idea as "buying stocks with stablecoins," but rather hoping that stablecoins can become a tool for settlement and margin management.
Second, "instant settlement" means evolving delivery from the traditional T+1 to near real-time trading.

The most direct benefit of this is avoiding the various risks arising from the time difference between trading and settlement. The NYSE specifically mentioned its collaboration with BNY and Citi to promote "tokenized deposits," which aims to allow clearing members to transfer and manage funds outside of bank operating hours, meet margin requirements, and cover funding needs across time zones and jurisdictions.

(3) Fractional share transactions

Having discussed the innovations in trading infrastructure, let's talk about the biggest benefits these innovations can bring (to non-US investors).

The narrative of tokenization in the US stock market has evolved to this point, and we've analyzed the advantages and risks of fractional shares many times, as I recall. However, this recent news from the NYSE marks the first official mention of the concept of "fractional share trading." The news mentions that the platform hopes to change the trading unit from the traditional one "share" to a unit closer to "asset allocation by amount." One Tesla share is currently worth $400, making it unaffordable for small investors and preventing potential price drops. But wouldn't it be tempting to be able to buy 0.025 Tesla shares for $10 on the new platform?

Of course, pleasing retail investors with limited investment capabilities is certainly not the NYSE's primary goal. The NYSE's initiative redefines the smallest tradable unit of a security, making it compatible with the granularity of tokenization and on-chain settlement.

This move will have several significant impacts. First, it will drastically change the way market making and liquidity are supplied, as liquidity will no longer be based solely on the depth of whole shares, but will be rebuilt around other criteria (such as price). Second, when platforms allow "tokenized shares and traditionally issued securities to be interchangeable," fractional shares make it easier to clear, exchange, and connect the same asset in different forms across different systems. This might sound abstract, but it can be simply compared to breaking down a large bill into smaller coins and unifying the currency, allowing it to be redeemed and used in different stores.

In this structural adjustment, the significance of fractional share trading has also been redefined. For a long time, fractional shares have been seen as a "convenience feature" for retail investors, but in this context, it's more like a prerequisite at the financial engineering level. Only when assets can be standardized and divided can they possess further composability, routeability, and programmability, and only then can they be incorporated into automated clearing and on-chain settlement systems. In other words, fractional shares are not about "making them affordable for more people," but about providing the technological foundation for the digital circulation of assets themselves.

(4) Native Digital Securities

The NYSE has also set very clear boundaries for the concept of "native digital securities." Its goal is not to simply map existing stocks to on-chain certificates like Nasdaq, but to explore a form of security that operates entirely on-chain from the moment rights are established.

This means that dividends, voting rights, and corporate governance mechanisms are not patched up with off-chain rules, but are directly embedded in the lifecycle of digital securities. This is not a mere technical upgrade, but a redefinition of how securities exist.

If native issuance is permitted, it means that the ownership of securities, the logic of the holder register, company dividends, voting, governance, and restrictions on custody and transfer must all be redesigned. At the same time, an even more attractive point is that the NYSE has limited the distribution channels to qualified broker-dealers, which is also a preemptive answer to the core question that regulators will ask: Is this not a "wild token market" where retail investors can freely mint and circulate tokens? Will it retain order, thresholds, and management?

II. Why now?

Why now? Why is the NYSE proposing such "radical" reforms at this moment?

For any innovative financial product that truly enters the mainstream market, the ultimate test is not whether the narrative is appealing, but whether the underlying system is robust enough to withstand the influx of large-scale, low-tolerance funds.

Over the past few years, there has been no shortage of discussions about "on-chain", "decentralization" and "efficiency revolution" in the market. However, these discussions have not been applied in reality because they are often based on immature funding, clearing and risk control systems.

The NYSE was also very smart; instead of trying to run a blockchain system on its own, it embedded tokenization into its existing market infrastructure.

Its parent company, ICE, is collaborating with traditional core banks such as BNY Mellon and Citibank to support tokenized deposits and related funding instruments within its clearinghouse system. This arrangement allows clearing members to allocate funds, fulfill margin obligations, and manage risk exposure even outside of banking hours, thus providing realistic funding and liquidity support for 24/7 trading.

What CryptoShalu wants to emphasize here is that when funds themselves begin to be tokenized, we are no longer talking about "conceptual assets" but "money" itself. Therefore, the standards for regulation, risk control, and access must be raised to an extremely high level; otherwise, the system simply cannot bear the trust of mainstream society.

This is precisely why the NYSE did not attempt to "start from scratch" in its market structure design. The platform emphasizes "non-discriminatory access" within a compliant framework, but this non-discrimination always has boundaries—it is only open to qualified broker-dealers, and all trading activities remain embedded within the existing market structure and regulatory logic, rather than existing outside the regulatory system. Therefore, what will secure a foothold in the future is not a new "counterparties," but rather the infrastructure layer that can support user understanding, asset allocation, and trading access on top of the compliant trading system.

Driven by major trends, securing a foothold in the ecosystem and controlling on-chain liquidity entry points has become an inevitable battleground for various platform players, including Ondo, Kraken, and MSX. This race involves not only crypto giants like Ondo, but also platforms like MSX, deeply rooted in the US stock market tokenization sector, which are building their defensive moats through high-frequency screening and the launch of new derivative products. For these smaller players with faster response times and more precise positioning, the potential for future growth is enormous, provided they can establish a firm foothold in this wave.

At the same time, tokenization does not change the legal nature of securities; tokenized shareholders still legally enjoy the same dividend rights and governance rights as those of traditional securities. This point was considered crucial in the meeting discussions: when a product attempts to enter the mainstream capital market, the clarity and solidity of rights and interests are far more important than the technological path itself.

From a broader perspective, the NYSE is attempting to address not only trading efficiency but also the long-standing problem of liquidity fragmentation plaguing traditional markets. By combining "high-trust institutional arrangements" with "more efficient technological means," it hopes to reintegrate trading demand that previously flowed to grey markets, over-the-counter structures, or unregulated platforms into a transparent, auditable, and accountable system. A recurring consensus at the meeting was that truly sustainable innovations are often not the most radical, but rather those that withstand the most rigorous scrutiny in terms of compliance and infrastructure. Once such a structure proves viable, the entry of traditional capital will not be an obstacle but rather an accelerator.

From a legal perspective, the deeper significance of this process goes beyond technological upgrades; it represents a phased evolution in capital formation. Through on-chain clearing and custody, traditional financial institutions can make asset allocation more global and time-continuous without overturning existing securities laws and regulatory frameworks. This is not a case of "the old system being replaced by new technology," but rather the integration of new technology into the core and most rigorous operating logic of the old system—and this is precisely the prerequisite for mainstream finance to truly begin accepting a new form.

Robinhood will release its full-year 2025 earnings report on February 10.

Popular Articles