NYSE Tokenized Settlement: The Inevitable Expansion To Public Blockchains, According To CryptoQuant CEO

NEW YORK, March 2025 – The New York Stock Exchange’s exploration of a 24/7 tokenized trading platform represents a pivotal moment for traditional finance, with industry leaders now predicting its eventual integration with public blockchain networks. CryptoQuant CEO Ju Ki-young recently articulated this vision, drawing a direct parallel to Bitcoin’s own path from niche asset to regulated investment vehicle. His analysis provides a crucial framework for understanding how the world’s largest stock exchange might bridge the gap between private, permissioned systems and the decentralized ecosystems that define Web3.

NYSE Tokenized Settlement: A Phased Institutional Approach

The New York Stock Exchange’s reported plans signal a strategic shift in how capital markets operate. Initially, the exchange will likely deploy a permissioned blockchain for its tokenized settlement system. This controlled environment offers several immediate advantages for a regulated entity like the NYSE. For instance, it allows for known participant verification, adjustable transaction speeds, and direct oversight—factors critical for maintaining market integrity and complying with existing securities laws. Major financial institutions, including JPMorgan with its JPM Coin and the Australian Securities Exchange with its now-retired CHESS replacement project, have previously tested similar closed-loop systems for specific asset classes.

However, this initial phase is widely viewed as a foundational step. The long-term value proposition of tokenization—including true 24/7 global liquidity, fractional ownership of high-value assets, and seamless cross-platform interoperability—is maximized on networks with broader participation. Consequently, the industry is closely watching how the NYSE’s architecture will evolve. Ju Ki-young’s commentary underscores a growing consensus: while permissioned chains provide a compliant starting point, public chains offer the ultimate destination for scale and innovation.

The Bitcoin Precedent: A Blueprint for Public Chain Integration

CryptoQuant’s CEO provided a powerful historical analogy to contextualize the NYSE’s potential trajectory. He referenced Bitcoin’s journey toward mainstream acceptance, which did not begin with direct, spot exchange-traded funds (ETFs). Initially, institutional and retail investors gained exposure through indirect and often cumbersome vehicles.

Grayscale Bitcoin Trust (GBTC): For years, this publicly quoted trust was the primary way for traditional investors to gain Bitcoin exposure without directly holding the asset, despite trading at significant premiums or discounts to its net asset value.
Corporate Balance Sheets: Companies like MicroStrategy pioneered the practice of holding Bitcoin as a treasury reserve asset, demonstrating institutional conviction and creating a new pathway for market participation.
Regulatory Evolution: Only after years of market development, custody solution maturation, and regulatory dialogue did the U.S. Securities and Exchange Commission approve spot Bitcoin ETFs in January 2024, creating a direct, regulated bridge to public markets.

This evolution from indirect to direct access mirrors the potential path for public chain integration in tokenized settlements. The NYSE’s permissioned system could serve a similar function to the Grayscale Trust—a first, controlled step that builds market familiarity, tests infrastructure, and informs regulatory frameworks before a broader, more open system emerges.

Expert Analysis on Compatibility and Regulation

Ju’s concluding point about developing compatibility with public chains as tokenization rules are established is particularly salient. The technical and regulatory hurdles are significant but not insurmountable. On the technical front, interoperability protocols and cross-chain communication standards are advancing rapidly. Projects are creating secure bridges and layer-2 solutions that could allow a permissioned NYSE ledger to communicate state changes or settle final transactions on a public chain like Ethereum, Solana, or a dedicated institutional network.

From a regulatory perspective, the path forward involves creating clear guidelines for asset custody, investor protection (like Reg D or Reg S exemptions adapted for blockchain), anti-money laundering (AML) compliance, and market manipulation safeguards in a decentralized environment. The development of these rules will be a collaborative process between regulators like the SEC and CFTC, traditional financial entities, and blockchain technology providers. The successful integration seen in the spot Bitcoin ETF market, which combines traditional brokerage interfaces with blockchain-based custody, provides a working model for such a hybrid future.

The Impact on Public Blockchain Ecosystems and Traditional Finance

The potential expansion of NYSE-grade settlement to public chains would have profound, dual-sided impacts. For the blockchain industry, it would represent the ultimate validation of its underlying technology for high-value, high-stakes applications. It could drive massive inflows of institutional capital into the ecosystem, not just as speculative investment but as functional infrastructure. This would likely accelerate development in areas like scalability, privacy (through zero-knowledge proofs), and security to meet the non-negotiable standards of global equity markets.

For traditional finance, the implications are equally transformative. Tokenization on public chains could unlock trillions of dollars in currently illiquid assets—from real estate and private equity to fine art and intellectual property—by making them fractionally tradable on a global, 24/7 market. It would dramatically reduce settlement times from the current T+2 standard to near-instantaneous finality, freeing up capital and reducing counterparty risk. Furthermore, it would create entirely new financial products and services built around programmable assets, automating functions like dividend distributions and corporate actions through smart contracts.

Conclusion

The analysis from CryptoQuant CEO Ju Ki-young provides a compelling and evidence-based roadmap for the future of financial infrastructure. The NYSE tokenized settlement initiative is not an isolated experiment but likely the beginning of a multi-phase integration between the world of traditional securities and public blockchain networks. By following the precedent set by Bitcoin’s own adoption curve—moving from closed, indirect systems to open, regulated, and direct access—the financial industry can navigate the complex transition toward a more efficient, liquid, and inclusive global market system. The development of rules for tokenization and the parallel engineering of public chain compatibility will be the critical tasks that determine the speed and success of this historic convergence.

FAQs

Q1: What is a tokenized settlement system?
A tokenized settlement system uses blockchain technology to represent traditional assets, like stocks or bonds, as digital tokens. These tokens can be traded and settled directly on a digital ledger, potentially making the process faster, cheaper, and available outside standard market hours.

Q2: Why would the NYSE start with a permissioned blockchain instead of a public one?
Permissioned blockchains offer greater control over who can participate and validate transactions. This allows the NYSE to maintain its strict regulatory compliance, ensure privacy for trading data, and manage the network in a way that aligns with existing securities laws before exploring more open systems.

Q3: What are the main benefits of eventually using public blockchains for this?
The primary benefits include greater interoperability with other blockchain-based financial services, enhanced transparency and auditability, access to a global pool of liquidity and innovation, and the ability to leverage the robust security and decentralization of established public networks.

Q4: How does this relate to Bitcoin ETFs?
The analogy drawn by CryptoQuant’s CEO suggests that just as Bitcoin entered mainstream finance first through indirect, controlled vehicles (like trusts) before gaining direct access via ETFs, NYSE tokenization may follow a similar path—starting on a closed, permissioned system before expanding to more open, public blockchain infrastructure as the market and regulations mature.

Q5: What are the biggest challenges to expanding to public chains?
The key challenges are regulatory clarity, achieving the necessary transaction speed and scalability for global markets, ensuring enterprise-grade security and custody solutions, and designing systems that meet strict financial compliance requirements (like KYC and AML) within a decentralized framework.

NYSE Tokenized Settlement: The Inevitable Expansion to Public Blockchains, According to CryptoQuant CEO