Major U.S. Clearinghouse Receives SEC Go Ahead to Initiate Asset Tokenization

A subsidiary of The Depository Trust & Clearing Corporation (DTCC) – the U.S. financial system's clearinghouse backbone that processed $3.8Q (quadrillion) of securities transactions in 2024 – is now authorized to offer tokenization services.

What's the Scoop?

• No-Action Letter: The Depository Trust Company (DTC), a subsidiary of the DTCC, has received a no-action letter from the SEC that will allow it to "tokenize real-world, DTC-custodied assets in a controlled production environment" while remaining in full compliance with federal securities laws and regulations.
• Imminent Rollout: DTC anticipates it will begin rolling out a "preliminary base version" of its tokenization services in the second half of 2026; the group's no-action letter will initially allow it to offer tokenization service via blockchain for three years.
• Performance Criteria: Critical systems components for the tokenization service (e.g.; the blockchain and token tracking software) will be required to have "the ability to operate from both a primary and a secondary location, a maximum of a four-hour recovery time objective, no more than two minutes of data loss from an outage, and annual out-of-region disaster recovery and resumption testing. "
• Limited Launch: The preliminary base version will be limited to individual stocks in the Russell 1000 Index, Treasury securities, and ETFs that track major indices. Tokenized representations of these securities will be transfer restricted to registered wallets.
• Crypto Competitors: DTC's upcoming tokenization services will launch in direct competition with some crypto-native RWA offerings, most notably Ondo Finance.
• Future of Finance: In reference to the no-action letter, SEC Chair Paul Atkins acknowledged that "U.S. financial markets are poised to move on-chain." Atkins also touted the superior predictability, transparency, and efficiency afforded by blockchain technology for investors.