DTCC Subsidiary Bags SEC No-Action Letter Amid Tokenization Move

The Depository Trust & Clearing Corporation (DTCC), the world’s largest settlement system, is modernizing the U.S. financial system. According to a press release, the DTCC depository subsidiary, DTC, has received an important No-Action letter from the United States Securities and Exchange Commission (SEC). 

This letter allows DTCC to tokenize DTC-held assets into digital tokens on approved blockchain networks. Intriguingly, this marks a significant step forward in the use of blockchain-based securities.

DTCC’s Moves Come With a Lot of Benefits

DTC can start using this new tokenization service over the next three years. The financial service giant expects to launch the platform in the second half of 2026. 

At that time, the service will support tokenized versions of Russell 1000 stocks, major index ETFs, and U.S. Treasurys. Additionally, this move will enable market participants to access digital versions of some of the most traded securities worldwide.

DTCC also assures that digital tokens will have the same rights, protections, and ownership as traditional securities. Furthermore, the company intends to use Chainlink’s technology to support this tokenization service. Chainlink, recognized for its secure and reliable system, will allow smooth delivery of traditional securities on approved Layer 1 and Layer 2 networks.

Undoubtedly, DTCC will make traditional securities trading easier and more efficient. 

This will help reduce any operational difficulty, increase clarity, and update how assets are managed over time. The letter also affirmed that the change could help more individuals use tokenized real-world assets (RWAs) in global finance. 

@Just recently, the U.S. Commodity Futures Trading Commission (CFTC) announced that tokenized assets can now be used as collateral in derivatives markets. 

It is worth noting that this marks a big step in linking cryptocurrency with traditional finance. It also demonstrates that the commission is becoming more open to digital assets while continuing to protect investors.

The commission announced a pilot program that allows certain digital assets to be used as collateral in U.S. derivatives markets. The assets included in this first phase are Bitcoin (BTC), Ethereum (ETH), and the USDC stablecoin. 

The guidance makes clear that the agency’s rules do not favor one technology over another. Tokenized U.S. Treasuries and other RWAs can also be used as collateral. Ultimately, industry leaders have responded positively to this latest development.

BlackRock CEO Speaks on Tokenization of Traditional Assets

BlackRock expects traditional financial assets, such as stocks, bonds, and real estate, to transition into tokenized versions over the next few decades. CEO Larry Fink described asset tokenization as the next major move for the firm.

Fink said he sees tokenization as the next wave of opportunity for BlackRock.  He emphasized that the world is still in the early stages of asset tokenization. However, he expects rapid growth ahead.