DTCC Unveils Digital Asset Sandbox

The Depository Trust & Clearing Corporation (DTCC), a core U.S. financial institution providing market infrastructure and settlement services, is launching a digital asset sandbox.

On Oct. 15, the DTCC unveiled the DTCC Digital Launchpad, a sandbox intended to facilitate exploration into mainstream financial applications for digital assets.

The DTCC said the project will provide an open ecosystem for technology providers and market participants to collaborate on pilots exploring applications for digital assets and tokenization in the mainstream financial system. The platform will provide distributed ledger technology (DLT) infrastructure enabling interoperability, freely flowing liquidity, and data harmonization for digital asset pilots.

The DTCC said the current digital asset landscape is marred by siloed initiatives and fragmented ecosystems, resulting in “conflicting standards, controls, and operational processes” within the industry.

“We’ve reached a critical inflection point in the adoption of digital asset technology, and DTCC is challenging the industry to rethink and reframe its siloed approach,” said Nadine Chakar, the global head of DTCC Digital Assets. “The ultimate objective of DTCC Digital Launchpad is to bring the industry together to build production-ready, secure, and efficient digital market infrastructure and standards that will transform capital markets for generations to come.”

DTCC plans to announce a series of “prioritized pilots” leveraging the launchpad in Q1 2025 from an initial cohort of invited participants. Clients will also be able to develop their own use cases for the platform supervision and support from the DTCC.

“DTCC Digital Launchpad will unify stakeholders from nearly every corner of the financial markets to solve the challenges facing adoption of digital asset technology,” said Frank La Salla, the president, CEO, and director of the DTCC.

The DTCC was launched in 1973 to provide clearing and settlement services within the U.S. financial system. In 2023, the DTCC and its subsidiaries processed $3 quadrillion worth of securities transactions.

Launchpad proof of concept

On the same day, the DTCC announced the results of an initial proof-of-concept leveraging the DTCC Digital Launchpad.

The initiative was led by the Japan Securities Clearing Corporation (JSCC) and explored how counterparties could leverage tokenization to optimize collateral management processes. The pilot focused on automating margin call processes using smart contracts and digital assets to bolster efficiency and transparency.

“By leveraging DTCC’s reusable blockchain-based infrastructure, we were able to jump-start our proof-of-concept, easily issuing digital assets such as cash, stocks, and bonds without needing to develop our own infrastructure,” said Konuma Yasuyuki the president & CEO of JSCC.

DTCC digital asset pilots

The digital asset sandbox is not the DTCC's first foray into exploring DLT technology.

In May, DTCC completed a pilot exploring distributing Net Asset Value (NAV) data for mutual funds on blockchain networks using Chainlink’s oracle infrastructure.

Ten major U.S. financial institutions participated in the project, including JP Morgan and Franklin Templeton. The pilot examined standardizing and automating the dissemination of NAV data within a DLT environment.

In April 2022, the DTCC also announced Project Lithium, a pilot testing instant settlement involving a central bank digital currency (CBDC) prototype.