The New York Stock Exchange is preparing for a future where stocks and other financial instruments can exist as blockchain based tokens. While tokenization is often framed as a way to speed up settlement and reduce costs, it also introduces a more complex challenge for regulators and market participants: how to protect sensitive trading and identity data while preserving the transparency required for market oversight.

Tokenization would move parts of today’s market infrastructure onto distributed ledgers. That shift forces regulators to rethink long standing assumptions about surveillance, record keeping and data protection. Unlike traditional trading systems, blockchain ledgers can make…

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