Wall Street has taken a significant step toward mainstream adoption of blockchain technology as the Depository Trust & Clearing Corporation (DTCC) launched its new DTCC Tokenization Service on October 28. DTCC, the central clearing and settlement hub for the US securities market, unveiled the platform to facilitate the issuance and transfer of tokenized securities among major financial institutions.
Major banks and asset managers join tokenization initiative
Twenty prominent financial institutions, including JPMorgan Chase, Citi, Fidelity, and Morgan Stanley, have signed agreements to participate in the new service. Additional firms, such as Bank of America, BNP Paribas, UBS, and Velocity Capital, have also committed to the platform. DTCC indicated it anticipates further expansion as more organizations join.
The new platform, operated by DTCC’s subsidiary Depository Trust Company (DTC), enables participants to convert traditional securities into tokenized assets and vice versa, with holdings accessible through a digital wallet. DTCC reported that tokenized securities on the platform will retain the same investor protections, ownership rights, and economic benefits as their traditional equivalents.
DTCC CEO Frank La Salla stated the service is designed to help organizations “responsibly adopt digital assets at scale,” aiming for increased efficiency and access to novel sources of liquidity.
“DTS will let institutions convert, transfer and hold tokenized securities while upholding the safeguards and economic rights of conventional assets,” DTCC said.
Technology and regulatory approval
The new DTCC Tokenization Service uses a multi-network, interoperable approach. Its initial implementation runs on both the Canton Network and DTCC’s private blockchain, which is built on Hyperledger Besu. The company has plans to integrate additional blockchain networks by 2027.
Eligible assets currently include stocks from the Russell 1000 index, major exchange-traded funds (ETFs) tracking key benchmarks, and tokenized US Treasury securities. DTCC reported it incorporated feedback from over 150 companies as part of its DTC Digital Asset Solutions Industry Working Group.
Mini dictionary: Hyperledger Besu is an open-source Ethereum client designed for both enterprise and public network applications, supporting private transactions and advanced access controls for blockchain development.
The Securities and Exchange Commission (SEC) granted DTCC’s DTC a no-action letter in December, authorizing the launch of this tokenization initiative on an approved blockchain for three years. The agency’s conditional approval signals a cautious but supportive regulatory environment for tokenized securities infrastructure.
The SEC has also approved rule changes for Nasdaq that enable tokenized settlement, currently limited to select stocks and ETFs, and is pursuing a broader innovation framework for crypto-related platforms.
| Institution | Current Involvement |
|---|---|
| DTCC | Operates DTS tokenization service |
| Nasdaq | Approved for tokenized settlements (Russell 1000, S&P 500, Nasdaq 100 ETFs) |
| SEC | Issued three-year no-action letter to DTC, approved limited tokenization rules |
Industry impact and future prospects
DTCC plays a central role in the US financial system, with over $114 trillion in assets under custody. Through DTC, it facilitates the settlement of nearly all securities traded on US exchanges.
The initial rollout of the tokenization service will focus on a limited set of assets, including Russell 1000 stocks, major ETFs, and tokenized US Treasury securities. While benefits such as quicker transfers and new uses for collateral have been highlighted, DTCC acknowledged that these advantages remain unproven for retail investors.
The SEC’s current authorization is for three years, and not a full regulatory approval, but DTCC’s position as a core infrastructure provider offers tokenized securities a regulated and institutionally supported foundation. The commitment by major banks and asset managers suggests the transition from isolated pilot projects toward live blockchain-based financial infrastructure is underway.
