Written by: Guo Fangxin, Sha Jun

On February 3, the tokenized real asset platform Ondo Finance announced the launch of its "Ondo Global Listing" service, claiming it can introduce U.S. stocks to the blockchain in "near real-time" at the same time as their IPO listing, allowing trading to open on major blockchains on the first day of listing. This move not only attempts to eliminate the "IPO time difference" between Wall Street and the crypto world but also showcases its ambition to transform from "intermediaries" to "digital underwriters," backed by over $2.5 billion in assets under management and $9 billion in cumulative trading volume.

However, no matter how high-profile or revolutionary Ondo's efforts are, they represent merely a "downstream breakthrough" initiated by crypto-native protocols. The true limit of the tokenization wave in U.S. stocks is still determined by traditional infrastructure giants. On January 19, 2026, the New York Stock Exchange (NYSE) officially announced that it is developing a platform for tokenized securities trading and on-chain settlement, and will seek necessary approvals from regulators for this platform.

This news sparked considerable discussion in both traditional finance and the crypto industry, but most people simplified it to a single statement—"The NYSE is going to tokenize U.S. stocks." While this statement is certainly correct, it is far from sufficient. If this matter is merely understood as "stocks on the blockchain" or "traditional finance moving towards Web3," the essence has not been grasped. The NYSE's actions represent a well-considered institutional revolution.

Crypto Law hopes to start from this news itself and systematically outline the current development process of U.S. stock tokenization. As the opening piece of this series, we will specifically discuss what this significant news entails and what impact it will have on the entire traditional U.S. stock industry.

1. What does the NYSE news actually say?

From the information released by the NYSE, it is clear that the NYSE is not merely labeling stocks as "tokens." The core of this initiative is not about a specific product but about the complete disassembly and reconstruction of the entire securities trading system. We have identified four core transformations, outlined as follows:

(1) 7×24 Hour Trading

The 7×24 hour trading is a core distinction between the crypto financial market and the traditional financial market. However, the NYSE's mention of 7×24 hour trading is not simply about extending trading hours; it explicitly focuses on "post-trade infrastructure." What it aims to create is a new digital platform that combines the existing matching engine (Pillar) with a blockchain-based post-trade system, thereby enabling the "trading, settlement, and custody" chain to operate continuously. In simple terms, the NYSE wants to create new technologies and institutional arrangements that allow the settlement system itself to adapt to continuous operation.

The reason traditional securities markets have long adhered to fixed trading hours is primarily due to various processes in the workflow, such as settlement and fund allocation, which heavily rely on bank operating hours and clearing windows. The NYSE proposes to use on-chain or tokenized financial instruments to cover "funding gaps during non-business hours," thereby activating the "night/weekend" market closure times.

Whether all-day trading is good or bad for financial markets and retail investors should be considered cautiously, according to Crypto Law. However, for U.S. stocks themselves, the benefits certainly outweigh the drawbacks. After all, as the world's core asset pool, if U.S. stock trading hours remain fixed domestically, it cannot further evolve into a more globalized asset liquidity base.

(2) Instant Settlement with Stablecoins

As mentioned earlier, the NYSE hopes to leverage new "on-chain or tokenized financial instruments" to extend trading hours. One of the core tools for this is the settlement tool.

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

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

The most direct effect of this is to avoid various risks arising from the time difference between trading and settlement. The NYSE specifically mentioned that it is collaborating with BNY and Citi to promote "tokenized deposits," aiming to allow clearing members to transfer and manage funds during non-business hours, meet margin requirements, and cover cross-time zone and cross-jurisdiction funding needs.

(3) Fractional Share Trading

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

The narrative of U.S. stock tokenization has developed to this point, and we have analyzed the benefits and risks of fractional shares many times. However, this time, the NYSE's news should be considered the first official mention of the concept of "fractional share trading." The announcement states that the platform hopes to change the trading unit from the traditional "1 share" to a unit that is closer to "asset allocation by amount." One share of Tesla is currently valued at $400, which is unaffordable for small retail investors, but if they can buy 0.025 shares of Tesla for $10 on the new platform, wouldn't that be enticing?

Of course, making retail investors with average investment power happy is certainly not the NYSE's primary goal. The NYSE is redefining the minimum tradable unit of securities to make it compatible with tokenization and on-chain settlement granularity.

The implications of this move are significant. First, the methods of market making and liquidity supply will undergo a tremendous change, as liquidity will no longer revolve solely around the depth of whole shares but will be rebuilt around other standards (such as amount). Second, when the platform allows "tokenized stocks and traditional securities to be interchangeable," fractional shares make it easier for different forms of the same asset to be settled, exchanged, and connected across different systems. This may sound abstract, but it can be simply likened to breaking down large bills into change and standardizing the currency for use in different stores.

In this structural adjustment, the significance of fractional share trading is also redefined. For a long time, fractional shares have often been seen as a "convenience feature" for retail investors, but in this context, it resembles a prerequisite at the level of financial engineering. Only when assets can be standardized and split can they possess further combinability, routability, and programmability, and be incorporated into automated clearing and on-chain settlement systems. In other words, fractional shares are not meant to "make it affordable for more people" but to provide the technical foundation for the digital circulation of assets.

(4) Native Digital Securities (Native Issuance)

Regarding the concept of "native digital securities," the NYSE has also provided very clear boundaries. Its goal is not to simply map existing stocks to on-chain certificates like Nasdaq but to explore a form of securities that operates entirely on-chain from the point of rights confirmation.

This means that dividends, voting rights, and corporate governance mechanisms are not patched together through off-chain rules but are directly embedded in the lifecycle of digital securities. This is not a technical packaging upgrade but a redefinition of the existence of securities.

Once native issuance is allowed, it means that the rights confirmation, shareholder registry logic, company dividends, voting, governance, and custody and transfer restrictions of securities must be redesigned. At the same time, a more attractive point is that the NYSE limits the distribution channels to qualified broker-dealers, which is a preemptive answer to the core question regulators will ask: this is not a "wild token market" for retail investors to freely mint and circulate; it still retains order, thresholds, and management.

2. Why Now?

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

Any truly innovative financial product that moves toward the mainstream market is ultimately tested not by how appealing the narrative is but by whether the underlying system is robust enough to withstand the entry of large-scale, low-tolerance funds.

In recent years, there has been no shortage of discussions about "on-chain," "decentralization," and "efficiency revolution," but these discussions have not been applied in reality because they often rely on immature foundations of funding, clearing, and risk control.

The NYSE is also very clever; it does not attempt to operate a blockchain system centered on itself but embeds tokenization within existing market infrastructure.

Its parent company, ICE, is collaborating with traditional core banks like BNY Mellon and Citibank to support tokenized deposits and related financial instruments within its clearinghouse system. This arrangement allows clearing members to allocate funds, fulfill margin obligations, and manage risk exposure even during non-business hours, thereby providing realistic funding and liquidity support for 7×24 hour trading.

Here, Crypto Law wants to emphasize that when funds themselves begin to be tokenized, we are no longer talking about "conceptual assets," but "money" itself. Therefore, regulatory, risk control, and access standards must be raised to a very high level; otherwise, the system cannot bear the trust of mainstream society.

It is precisely for this reason that the NYSE has not attempted to "start from scratch" in market structure design. The platform emphasizes "non-discriminatory access" within a compliance framework, but this non-discrimination always has boundaries—it is only open to qualified broker-dealers, and all trading activities are still embedded within existing market structures and regulatory logic, rather than floating outside the regulatory system. Thus, the future players that can establish themselves will not be new "counterparties," but rather the layer of infrastructure that can support user understanding, asset allocation, and trading access on top of a compliant trading system.

In the context of the overarching trend, seizing ecological positions and occupying on-chain liquidity entry has become a necessary battle for various platform players like Ondo, Kraken, and MSX. This race not only involves Ondo, a crypto-native giant, but also platforms like MSX, which are deeply engaged in the U.S. stock tokenization vertical, building their defensive moats through high-frequency screening and launching new derivative products. For these smaller players, who can respond more quickly and target more precisely, as long as they can establish a foothold in this wave, the future potential is enormous.

At the same time, tokenization does not change the legal attributes of securities; tokenized shareholders still fully enjoy the dividend rights and governance rights corresponding to traditional securities. This point was considered crucial in the discussions: when a product attempts to enter the mainstream capital market, whether the rights are clear and the rights confirmation is solid is far more important than the technical path itself.

From a more macro perspective, what the NYSE is trying to solve is not just the issue of trading efficiency but also the long-standing problem of liquidity fragmentation in traditional markets. By combining "high-trust institutional arrangements" with "more efficient technical means," it hopes to bring trading demands that originally flowed to dark pools, over-the-counter structures, or unregulated platforms back into a transparent, auditable, and accountable system. A recurring consensus in the discussions was that true innovations that can transcend cycles are often not the most radical ones but those that can withstand the most stringent tests at the compliance and infrastructure levels. Once such a structure is validated as feasible, the entry of traditional funds will not be a hindrance but rather an accelerator.

From a legal perspective, the deeper significance of this process is not just a technical upgrade but a phased evolution of the way capital is formed. 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 "the old system being replaced by new technology," but rather new technology being integrated into the core and most rigorous operational logic of the old system—which is precisely the premise for mainstream finance to begin accepting a new form.

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