DTCC unveils tokenization service with twenty firms

By Davis Washington

interne

The Depository Trust & Clearing Corporation (DTCC), a cornerstone of global financial market infrastructure, launched its much-anticipated DTCC Tokenization Service on October 28, 2026. This pivotal move enables eligible financial institutions to create blockchain-based representations, or “digital twins,” of traditional securities held in custody by the Depository Trust Company (DTC), a DTCC subsidiary.

The initial rollout sees twenty major financial institutions signing agreements to access the service, which aims to enhance liquidity, collateral mobility, and capital efficiency in regulated markets.

Understanding the DTCC tokenization service

This launch represents a significant stride in bridging traditional finance with nascent blockchain technology. It follows extensive development, regulatory engagement, and collaborative efforts across the industry, culminating years of work. DTCC, which custodies over $114 trillion in assets, is positioning the service as a foundational element for integrating digital assets into established financial market infrastructure.

The DTCC Tokenization Service is designed to seamlessly integrate digital assets into existing financial market frameworks. It allows DTC Participants to mint tokenized versions of securities already held within DTC’s robust custody infrastructure. These digital twins carry the exact same ownership rights, investor protections, and economic entitlements as their traditional counterparts, ensuring regulatory compliance and safeguarding investor interests.

The innovation lies in how these tokenized securities move. Transfers between registered digital wallets on the platform constitute settlement in real-time, effectively eliminating the typical wait for the next business day. This accelerates the settlement process, promising greater efficiency and reduced counterparty risk for market participants.

The design deliberately keeps the existing custody chain intact, with tokenized securities remaining registered to DTC’s nominee, Cede & Co.

How tokenized securities function

Each tokenized security is essentially a digital representation of an asset that already exists within DTC’s custody. Eligible DTC Participants can convert these assets between their traditional and tokenized forms, and then transfer them to participating institutions’ digital wallets. This doesn’t create a new class of security; instead, it provides an alternative, blockchain-enabled form for the same underlying asset.

The service currently operates on two foundational networks: the Canton Network and DTCC’s proprietary Besu network. The Canton Network, developed by Digital Asset, offers a privacy-enabled open blockchain solution designed for regulated financial institutions. DTCC’s private Besu network provides a controlled environment for operations. Both networks underwent rigorous testing during live production trades on July 15, 2026, involving over 30 firms.

Regulatory Foundation and Industry Collaboration

The launch of the DTCC tokenization service was significantly bolstered by a crucial no-action letter from the U.S. Securities and Exchange Commission (SEC) staff. Issued to DTC on December 11, 2025, this letter provides a three-year regulatory framework for the service.

It permits a limited, voluntary pilot program, focusing on selected large-cap stocks from the Russell 1000 index, Exchange-Traded Funds (ETFs) tracking major indices, and U.S. Treasury bills, notes, and bonds.

This authorization is specific, covering only 34 eligible securities representing approximately $30 trillion in market value at launch. It does not establish a general framework for tokenized securities or extend relief to other firms, highlighting a cautious, phased approach to integrating distributed ledger technology into established financial markets. Only DTC Participants can initiate tokenization, not issuers directly.

Developing this complex service required extensive input from the financial industry. Over 150 firms participated in the DTC Digital Assets Solutions Industry Working Group, providing critical insights and feedback. This broad collaboration ensured the service was designed to meet institutional needs within a trusted operational framework.

Leading Institutions Embrace Digital Securities

The initial uptake of the DTCC Tokenization Service underscores the industry’s readiness to move beyond experimentation towards practical adoption. Twenty leading financial institutions have already signed agreements to access the platform. This group includes global banking giants and major investment firms, signaling strong confidence in DTCC’s approach to digital assets.

Notable participants include Bank of America, Barclays, BNP Paribas, Citadel Securities, Citi, Fidelity Investments, JPMorgan, Morgan Stanley, State Street, and UBS. Other firms like Alpaca, Apex Clearing Corporation, Brown Brothers Harriman, Clear Street, DriveWealth, Edward Jones, Interchange Clearing, Marex, Mirae Asset Securities (USA) Inc., and Velocity Capital LLC have also joined. DTCC expects to onboard additional institutions on a rolling basis as the service expands.

These firms can now leverage “digital twins” of their holdings to enhance various financial operations. They can convert traditional securities into tokenized forms and transfer them to registered digital wallets. This functionality promises to unlock new efficiencies in areas such as securities lending, collateral pledges, and U.S. Treasury repurchase agreements, as demonstrated in earlier pilot programs.

Stellar’s Role in DTCC’s Multichain Vision

Looking ahead, DTCC plans a significant step by integrating its tokenization service with the Stellar network as its first public blockchain integration. This move, expected in the first half of 2027, will bring DTC-tokenized assets onto a public ledger. Discussions between DTCC Digital Assets head Nadine Chakar and Stellar CEO Denelle Dixon at Meridian 2026 affirmed Stellar’s suitability for this role.

“We have put up our parameters of what we need in a chain. Stellar went through them with flying colors,” Chakar noted, highlighting Stellar’s enterprise-grade compliance features, built-in asset clawback capabilities, and high-throughput architecture. This integration aligns with DTCC’s broader multichain strategy, aiming to provide institutions with flexibility across different blockchain networks while maintaining access to traditional market infrastructure.

The Stellar integration will enable rapid conversion of traditional assets into tokenized forms and manage the full asset lifecycle, including corporate actions and reporting. DTCC plans to deploy specialized validator nodes on Stellar and use its smart contract platform, Soroban, to embed compliance rules directly into tokenized assets.

This ensures transfers only occur between whitelisted institutional wallets, maintaining regulatory integrity. SEC flags tokenization as a key area of focus, underscoring the importance of such compliance features.

Future Roadmap and Industry Impact

The launch represents a foundational phase for DTCC’s ambitious digital assets strategy. Frank La Salla, President and CEO of DTCC, described it as the “culmination of years of work” to establish a regulated framework for tokenized securities. He emphasized that extending DTC’s existing resiliency and operational standards into digital markets lays the groundwork for responsible institutional adoption at scale.

Nadine Chakar, Managing Director, Global Head of DTCC Digital Assets, views this as “only the beginning” of building a Web3 ecosystem that seamlessly bridges traditional market infrastructure with digital ledger technology.

Brian Steele, Managing Director and President of Clearing & Securities Services at DTCC, pointed to the breadth of industry engagement as proof that the market is ready to move beyond theoretical discussions to practical, scalable solutions.

Beyond the Stellar integration, DTCC’s roadmap includes adding further blockchain networks in 2027. They also plan to explore capabilities like digital cash and on-chain netting in 2027 and beyond.

This progressive rollout aims to continuously evolve the DTCC tokenization service, adapting to the dynamic landscape of digital finance and solidifying its role in the future of market infrastructure. Securitize Stellar integration also suggests a future for tokenized assets.