DTCC Starts Live Tokenized-Securities Trades With More Than Two Dozen Firms

The Depository Trust & Clearing Corporation, the market infrastructure that clears and settles most U.S. securities trades, began running live production trades of tokenized stocks and Treasurys on Wednesday, moving its tokenization effort out of testing and into a live environment.

More than two dozen firms across traditional finance and digital-asset markets are taking part, DTCC told The Defiant in a note. The Wall Street Journal, which reported the details of Wednesday's trades, put the count at nearly 40 financial firms and technology providers and named JPMorgan, Goldman Sachs, BlackRock, Vanguard and the New York Stock Exchange among them. DTCC's depository subsidiary, The Depository Trust Company, custodies more than $114 trillion in securities.

The DTCC does not sit at the edge of U.S. markets but at their center. Rather than build a new venue, it is tokenizing assets it already holds, a design that could set the reference point other trading platforms plug into. It also dwarfs the current onchain market for tokenized real-world assets, where tokenized stocks and Treasury funds together account for only a few billion dollars of value.

What Traded

DTCC described Wednesday's activity as "initial, limited production trades" of tokenized real-world assets running throughout the day, spanning collateral, repo, equities, margin and asset transfers. The company called it its largest tokenization production effort by breadth of use cases, asset classes and number of participants.

The assets being tokenized include shares of Microsoft and Circle Internet Group, the Invesco QQQ Trust and State Street's SPDR S&P 500 ETF, and the iShares 0-3 Month Treasury Bond ETF, along with Treasurys of varying maturities, according to the Journal. Participating firms test the service by instructing DTCC to settle specific transactions on the blockchain. JPMorgan, for one, will tokenize part of its QQQ holdings, the Journal reported.

From Pilot to Production

DTCC set out this timeline in May, when it said it would run limited production trades in July and launch the full service in October. At the formal launch, firms that keep assets at the clearinghouse will be able to convert some of their securities into tokens. The service is built on DTCC's ComposerX platform and has been developed with an industry working group of more than 50 firms, including asset managers, custodians, banks and trading venues.

The program rests on a no-action letter the U.S. Securities and Exchange Commission granted DTC in December, which lets the depository offer a defined tokenization service for three years. The clearance covers a set of highly liquid assets, including constituents of the Russell 1000, major-index ETFs and U.S. Treasurys. DTCC says the tokenized versions carry the same ownership rights, entitlements and investor protections as the assets held in traditional form.

The trades are deliberately narrow. "Limited production" means DTCC is validating settlement, custody and reconciliation with real assets and real workflows, not opening the service to broad use, which is not due until October. DTCC has not published an official participant list or trade figures, and its own count of the firms taking part, more than two dozen, is lower than the nearly 40 reported by the Journal. The company has also not said whether the trades settle on a public blockchain or a permissioned ledger.