The Depository Trust & Clearing Corporation (DTCC), a leading Wall Street operator, announced on Monday that it will commence limited production trades of tokenized securities in July, with a broader launch scheduled for October. The new service, developed within DTCC's Depository Trust Company, will enable firms to create digital versions of assets already held in custody while maintaining the same ownership rights and protections. This system has been designed with input from over 50 firms, including prominent institutions such as BlackRock, Goldman Sachs, and JPMorgan, as well as crypto-native companies like Anchorage and Circle. As a central piece of market infrastructure, DTCC's move into blockchain-based settlement marks a significant milestone, with the firm processing trillions of trades daily and serving as custodian of more than $114 trillion in securities.
The process of tokenization, which involves representing assets like stocks or bonds on a blockchain, has garnered increasing interest from traditional financial institutions due to its potential to reduce settlement times, lower costs, and expand market access to new participants. According to Frank La Salla, DTCC President and CEO, 'We believe tokenization will significantly alter the functioning of markets, bringing increased liquidity, transparency, and efficiency to investors.' This development is part of a broader push towards tokenization on Wall Street, with other major operators like Nasdaq and Intercontinental Exchange also exploring the use of blockchain technology to issue and trade digital assets.
These efforts are driven by a desire to create a shared infrastructure for trading stocks, bonds, and digital assets, often referred to as an 'everything exchange.' DTCC has been working towards this goal for some time, having tested distributed ledger systems and participated in projects like the Canton Network. In December, the firm received a no-action letter from the SEC, allowing it to offer tokenization services for a specific set of assets, including Russell 1000 stocks, ETFs, and U.S. Treasuries.