Is Avalanche the ‘Designated’ Tokenization Chain for ICE After a Year of Testing?

Original | Odaily Planet Daily ( @OdailyChina )

*Author | Wenser ( @wenser2010 )*

Will Avalanche become the official tokenization blockchain network for ICE, the parent company of the New York Stock Exchange?

Last week, Cooper, the president of Ava Labs, stated that the New York Stock Exchange has been testing Avalanche technology for the past year and evaluating feasible paths for integrating it into existing trading systems. Currently, both parties have established a cooperative relationship, but the New York Stock Exchange has not yet confirmed whether it will choose Avalanche as its blockchain for tokenized securities. ICE has stated that the two sides are closely cooperating, and the Avalanche chain meets multiple requirements, but neither side has announced a mutual selection yet.

In January this year, the New York Stock Exchange announced plans to launch a tokenized trading and on-chain settlement platform for U.S. stocks and ETFs. In August, ICE, the parent company of the New York Stock Exchange, invested in tZERO and made it a platform partner.

With the U.S. SEC opening up innovative exemptions for tokenized stock trading platforms, the focus of competition among public chains has shifted to the integration of traditional financial market liquidity trading platforms.

Why ICE is Interested in Avalanche: Technical Strength, Compliance Advantages, Mature Cases

At the Avalanche summit held last week, Michael Blaugrund, head of strategic planning at ICE, stated that the company has been in "close contact" with the Avalanche team during the evaluation of blockchain platforms, and that "Avalanche meets our requirements in many ways."

From the existing information, the main reasons why the Avalanche chain has become a "potential partner" for ICE can be summarized in three points:

First, the strong technical strength accumulated by the Avalanche chain.

As an established public chain, Avalanche has certain accumulations in public chain performance, institutional wallet support, interoperability, and connectivity with existing securities infrastructure. Its average transaction cost is also very low, typically around $0.001 to $0.02.

Second, the compliance advantages of the Avalanche chain.

Apart from the inherent advantages of U.S. domestic companies, unlike other types of open public chains, the Avalanche chain allows institutions to directly embed compliance rules at the protocol level while retaining interoperability with a broader ecosystem. Related features include user and transaction whitelists, validator permission control, contract deployment control, isolation and self-control, Evergreen institutional framework, and privacy and audit balance. In simple terms, institutions can flexibly adopt it while meeting regulatory compliance requirements. Previously, Avalanche token-related ETFs and exchange spot products launched by companies such as VanEck, Bitwise, and Grayscale also reflect its strict compliance.

Third, the mature cases of the Avalanche chain.

Stablecoins in Wyoming, vehicle ownership in California DMV, the first stablecoin supported by the Korean won (KRW1) launched by the Korean crypto asset custodian BDACS, a multi-token platform based on Avalanche launched by Japanese payment giant TIS, the UAE PASS digital identity system based on Avalanche, and the $2.7 billion asset tokenization platform Progmat in Japan, as well as the token securities platform built by Hanwha Investment & Securities based on Avalanche, all operate on the Avalanche chain and meet local regulatory requirements. In terms of existing mature cases, Avalanche has achieved remarkable results.

The Conspiracy Between Securities Exchanges and Public Chains: Mutual Need Rather Than Strength Comparison

At the same event, Cooper, the president of Ava Labs, stated, "It is expected that within the next year, some securities trading venues will begin to offer 24-hour trading services on business days."

"Will it be mainstream exchanges? Will it be the largest securities exchanges in the world? Such as the London Stock Exchange, the New York Stock Exchange, and the Chicago Mercantile Exchange? I am not sure about that," he said. "Many smaller securities trading venues are vigorously proving their attractiveness to attract liquidity."

It is evident that to some extent, introducing public chain networks and launching tokenization platforms has become a consensus among many securities exchanges. After all, building a blockchain network from scratch not only involves technical issues and time costs but also presents incremental opportunities compared to integrating into a mature blockchain network ecosystem. Even a well-known brokerage platform like Robinhood did not choose to build its own blockchain network from scratch but instead launched the current "RWA assets + Meme coin" dual-supported Robinhood Chain based on the technical foundation of the Ethereum ecosystem's L2 network.

For many public chain networks, the comfort zone of the crypto-native market can no longer support grander visions and longer-term development. To further gain more users, trading volume, and ecosystem construction projects, they can only seek transformation and cooperation with larger systems and frameworks. Traditional securities exchanges are naturally the best choice.

Especially for leading U.S. exchanges like the New York Stock Exchange and NASDAQ, their trading volume, liquidity, and user market are the big cake that crypto blockchain networks dream of. In the near future, as stock tokenization platforms pass regulatory scrutiny, the settlement and trading networks ultimately selected by traditional securities exchanges will achieve leapfrog development with the backing of their brand. In contrast, the various ecosystems currently reported in the crypto market are merely small potatoes.

Compared to past narratives such as ETF applications and public company treasury companies, the next round of institutional-level narratives that guide the development of the crypto industry may only be determined by the partner systems introduced by traditional securities exchanges. This will synchronize with the regulatory reforms led by the SEC, CFTC, and other institutions, pushing the crypto market towards a second growth curve and truly seizing the trillion-dollar explosion opportunity.

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