The Securities and Exchange Commission authorised DTCC to initiate a tokenisation service last week, and the organisation will begin by issuing US Treasury bonds in Canton.
The Depository Trust and Clearing Corporation said it is ready to bring tokenised US Treasuries on-chain and wants to add a “broad spectrum” of assets in the future.
The DTCC said on Wednesday that it aims to “enable a subset of US Treasury securities” held by its subsidiary, the Depository Trust business, to be minted on the Canton Network. The fintech business Digital Asset has created this permissioned blockchain.
This partnership creates a plan to bring real-world, high-value tokenisation use cases to market, starting with US Treasury securities and eventually expanding to a wide range of DTC-eligible assets across network providers.
The DTCC is responsible for important market infrastructure for clearing, settling, and trading US securities. Last year, its companies handled $3.7 quadrillion in securities transactions.
On Thursday, the Securities and Exchange Commission sent the company a rare “no-action” letter that allowed a securities tokenisation service “on pre-approved blockchains for three years.” The letter also said that the agency would not take action against DTCC if its product works as promised.
More securities will be turned into tokens
The three people are trying to deploy a minimal viable product in a controlled setting by the first half of 2026. The DTCC said that it will “increase the size and scope of the project in the months that follow based on client interest.”
The whole collaboration plan between the three organisations would “unfold over multiple years,” but for now, the goal is to give people access to “digitised financial instruments” in a secure and regulated environment.
The DTCC said last week that the SEC’s letter “applies to a defined set of highly liquid assets,” such as US Treasury bills, bonds, and notes, exchange-traded funds (ETFs) that track significant indexes, and the Russell 1000, which monitors the 1,000 biggest public US corporations.
The corporation also said that it would join the Canton Network’s governance and become co-chair of the Canton Foundation, which supports the blockchain.
Markets are moving on-chain
Paul Atkins, the head of the SEC, said on Friday that the company’s move “marks an important step towards on-chain capital markets.” This came after the SEC sent DTCC a no-action letter.
US financial markets are ready to move on, and the SEC is prioritising innovation and embracing new technologies to make this on-chain future happen.
Tokenising securities won’t be a big boost to the crypto market right away, but that might change if tokenised assets can better work together on blockchains.
Tokenised assets still require traditional financing structures. Their designs can be very different, and most of them are hosted on private blockchains, like Canton, which means that not all of them can operate with the larger decentralised financial system.
He added, “In the future, these RWAs could be used as collateral for borrowing, lent out, or traded in DeFi (composability).” “This will take time as technology improves, infrastructure is built, and rules and laws change.”