DTCC Receives Regulatory Green Light from SEC To Offer Tokenized Stocks, Bonds and Treasuries

A subsidiary of the Depository Trust and Clearing Corporation has been granted a very desirable no-action letter by the US Securities and Exchange Commission to offer a new securities market tokenization service. The approval will allow DTCC to tokenize stocks, bonds, and treasuries to bring them onto blockchain technology.

DTCC To Offer Tokenized Stocks, Bonds, and Treasuries

The Depository Trust and Clearing Corporation announced on Thursday, December 11, that its subsidiary, the Depository Trust Company, received regulatory approval to offer tokenized services provided by the SEC. Depository Trust Company will introduce a new service by tokenizing real-life assets held by DTC in a regulated production setting.

The DTC will tokenize a portfolio of highly liquid assets such as the Russell 1000 index, exchange-traded funds tracking major indexes, US Treasury bills, bonds, and notes, and the service is set to be launched in the second half of 2026. 

The DTCC operates infrastructures that are vital in the market, such as clearing, settlement, and trading of US securities. The SEC no-action letter provides it with a significant sign-off on its plan, and the agency will not engage in enforcement action should its proposed product perform as claimed. 

In thanking the SEC for the approval, Frank La Salla, the CEO of DTCC, said that the transformational benefits of tokenizing the US securities market include collateral mobility, new trading modalities, 24/7 access, and programmable assets.

What To Expect From DTCC’s Tokenized Offerings

With the approved structure, DTCC will issue on-chain representations of securities that already reside in its depository, as opposed to issuing a parallel set of so-called wrapped assets that exist independent of the traditional structure. 

The tokens are 1:1 linked to another share or bond on the books of DTCC, and the transfer is governed by the same ownership, settlement, and corporate-action rules as apply to conventional positions. The tokens will circulate over approved networks linked to the systems of the DTCC, and on-chain balances will be regularly aligned to the current ledgers. 

The design allows trades to settle with more programmability and quickly and retains legal title, voting rights, and disclosures. To the market participants, the shift is reflected in new avenues of repos in the form of new rails, collateral movements, and secondary trades, rather than a complete overhaul of securities law.

According to the DTCC, the no-action letter permits its subsidiary to provide a tokenization service to DTC Participants and their clients on pre-approved blockchains over a three-year period.

A Shift in Regulatory Approach

In recent months, the SEC has issued two no-action letters to physical infrastructure network projects that are decentralized (DePIN). In late September, the SEC also issued a no-action letter that allowed investment advisers to utilize state trust companies as crypto custodians.

This highlights an overall approach from the President Donald Trump administration to encourage the growth of blockchain and digital assets in the United States. The CFTC recently gave the green light for spot crypto trading on regulated exchanges in the US. This week, the OCC also announced that banks can now serve as middlemen for cryptocurrency deals.