The U.S. Securities and Exchange Commission (SEC) has issued a no-action letter to the Depository Trust and Clearing Corporation (DTCC), allowing the company to custody and tokenize stocks and other real-world assets on-chain. This move enables DTCC to provide tokenization services on a pre-approved blockchain for a period of three years.
DTCC is expected to launch tokenization services in the second half of 2026
As a central clearing and settlement house for stocks and fixed income products, DTCC plays a crucial role in the U.S. financial system. Many liquid assets in the U.S. market are held in DTCC's custody division - the Depository Trust Co. According to Bloomberg, the company is expected to launch new tokenization services in the second half of next year.
Michael Winnike, Head of Global Strategy and Market Solutions at DTCC, stated in an interview that once authorized, DTCC will also extend record-keeping to the blockchain.
This is the same legal rights as the stocks you hold in a traditional form from the DTCC account.
The SEC's authorization for tokenization services applies only to specific securities that are traded frequently. Winnike stated that this approval covers the Russell 1000 index, representing the largest 1,000 listed companies in the U.S., as well as exchange-traded funds (ETFs) tracking major indices and U.S. Treasury bills, bonds, and notes.
The SEC's 'no-action letter' marks an important step towards on-chain.
Winnike stated that the company's ultimate goal is to add the entire securities market valued at $100 trillion to the blockchain, which requires the U.S. Securities and Exchange Commission to further broaden the scope of the no-action exemptions.
The so-called 'no-action letter' is the formal response from the regulatory agency, indicating that based on the facts provided by the company when applying for review of the activity, the regulatory agency will not take enforcement action against the company regarding specific proposed activities. This can provide reassurance to companies exploring emerging or developing technologies.
The SEC's no-action letter is also a big plus for other market participants considering stock tokenization. Nasdaq, in its proposal submitted to the SEC, suggested that tokenized assets should be clearly labeled so that participants wishing to conduct trade clearing and settlement, as well as the DTCC responsible for clearing and settlement, can execute instructions correctly.
Winnike stated that tokenization services will help bridge the gap between the traditional and digital worlds, partly because this new technology will have the same legal rights and controls as traditional markets, including freezing or forcibly transferring assets when they are stolen.
The new blockchain service will also allow investors to transfer assets at any time, not just limited to Monday to Friday when the traditional market is open.
SEC Commissioner Hester Peirce stated in a statement:
Although the program is a pilot project subject to various operational restrictions, it marks an important step towards the on-chain market.
This article is SEC approved! DTCC has been authorized to launch tokenization services, officially going live in 2026, first appearing in Chain News ABMedia.