(Reuters) - The New York Stock Exchange, part of Intercontinental Exchange, announced a collaboration on Tuesday with digital asset company Securitize to help create tokenized versions of traditional financial securities.
Securitize will serve as the first digital transfer agent eligible to create blockchain-based securities for issuers of corporate and exchange-traded funds on an upcoming NYSE-affiliated Digital Trading Platform, the company said.
As part of the agreement, NYSE plans to work with Securitize as a design partner to develop a digital transfer agent program aimed at creating a system to help process tokenized securities trades on the blockchain.
U.S. exchanges such as the NYSE and rival Nasdaq are stepping up efforts to convert assets like stocks, bonds and funds into blockchain-based tokens.
Tokenizing involves converting a real-world asset into a digital token on a blockchain, or a decentralized, secure digital ledger of transactions.
Earlier this month, the U.S. Securities and Exchange Commission approved a Nasdaq proposal to allow certain stocks to be traded and settled in tokenized form, according to a regulatory filing.
"As we explore how tokenization can enhance capital markets, it is critical that new infrastructure is developed in a way that preserves the trust, transparency, and protections investors expect" NYSE President Lynn Martin said.
The companies will also collaborate on developing standards for digital transfer and tokenization agents, including regulatory, operational and technology requirements for institutional-grade infrastructure.
By Prakhar Srivastava in Bengaluru
Editing by Pooja Desai
