A fintech firm specializing in global trading and data has announced plans to integrate a new tokenized model for the National Market System equities. This initiative positions them to be the first alternative trading system (ATS) to facilitate the trading of tokenized U.S. equities.
In another development, eToro is set to offer tokenized U.S. shares, enabling investors to trade blockchain-represented versions of well-known stocks. This announcement coincided with their introduction of a new trading schedule that allows trading of 100 popular U.S. stocks outside of standard market hours.
The fintech company noted its unique position as the first regulated venue for U.S. equities to operate overnight, from 8 p.m. to 4 a.m. ET. The implementation of tokenization is viewed as a significant step towards achieving continual trading capabilities.
The tokenized solution aims to preserve existing investor protections and clearing processes while relocating the settlement function to a blockchain infrastructure. By utilizing blockchain technology—characterized by its decentralized and secure nature—this approach seeks to enhance transaction integrity. Blockchain can maintain a comprehensive and transparent ledger, which is difficult to manipulate, hence fostering trust in the trading ecosystem.
The CEO of the fintech firm expressed optimism regarding the integration of tokenized settlement infrastructure, describing it as an essential advancement towards achieving a fully operational 24/7 market. He stated that the tokenization process could effectively fill the gaps within an increasingly interconnected global trading environment.
In addition, the firm has recently become a data oracle operator on the Pyth Network, sharing up-to-date U.S. equities prices overnight for use in blockchain applications. Ongoing discussions with regulators and market stakeholders will ensure that this tokenized trading method complies with National Market System principles, particularly concerning investor fairness, transparency, and protection.
Institutional investors will also have new options with Alpaca’s launch of the Instant Tokenization Network (ITN). This platform enables them to convert traditional U.S. stocks into blockchain tokens and vice versa, even outside regular market hours. The ITN supports a process called “in-kind” minting and redemption, allowing token prices to remain closely aligned with their real-world counterparts, simultaneously addressing liquidity issues.
Through these initiatives, both firms are looking to push the boundaries of traditional finance and digital asset integration, aiming for a more dynamic trading landscape.