🔥 Key Takeaways
- The NYSE announced a blockchain-based tokenization plan for 24/7 trading and instant settlement of stocks and ETFs.
- A Columbia professor criticized the proposal, calling it “vaporware” due to vague technical and regulatory details.
- If successful, the plan could revolutionize traditional markets by merging them with blockchain efficiency.
- Regulatory hurdles and institutional adoption remain major challenges for implementation.
NYSE’s Tokenization Plan Faces Skepticism from Academia
The New York Stock Exchange (NYSE) made waves this week by unveiling an ambitious plan to tokenize stocks and ETFs, enabling blockchain-based 24/7 trading and instant settlement. While the proposal has generated excitement in crypto and traditional finance circles, Columbia University professor R.A. Farrokhnia publicly dismissed it as “vaporware,” citing a lack of concrete technical and regulatory roadmaps.
What the NYSE Is Proposing
The NYSE’s plan aims to leverage blockchain technology to modernize equity markets by:
- Introducing 24/7 trading for tokenized stocks and ETFs, eliminating traditional market hours.
- Enabling instant settlement (T+0), a major shift from the current T+2 standard.
- Providing blockchain-based custody solutions for digital securities.
If executed, this could significantly reduce counterparty risk, improve liquidity, and bridge the gap between traditional finance and decentralized finance (DeFi).
Why Critics Are Calling It “Vaporware”
Despite the bold vision, skepticism remains. Columbia professor Farrokhnia argues that the announcement lacks:
- Technical specifics: No clear blockchain infrastructure or partner details.
- Regulatory clarity: The SEC and other agencies have yet to approve such a model.
- Institutional buy-in: Major banks and asset managers may resist rapid adoption.
Farrokhnia’s critique echoes concerns that the NYSE’s plan is more of a conceptual pitch than a near-term reality.
Potential Impact on Markets
If the NYSE overcomes these hurdles, the implications could be massive:
- Increased market efficiency: Faster settlements and extended trading hours could attract global investors.
- Convergence with DeFi: Tokenized stocks could integrate with lending protocols and decentralized exchanges.
- Competitive pressure: Other exchanges may accelerate their own blockchain initiatives.
However, without regulatory approval and industry collaboration, the plan risks remaining theoretical.
Conclusion
The NYSE’s tokenization proposal represents a bold step toward modernizing financial markets, but skepticism from experts like Farrokhnia highlights the challenges ahead. Until concrete details emerge, the debate over whether this is a genuine innovation or mere “vaporware” will continue.
Read Also Epochs
