DTCC Launches Securities Tokenization Service, Initial Focus on Approximately 1,000 U.S. Stocks and Bonds

Key Points of This Article

• Approximately 1,000 securities including Microsoft stocks and U.S. Treasury bonds are targeted.
• About 40 companies, including JP Morgan, are conducting collateral transfers and repo transactions.

Start of Full Operation

On the 15th, the U.S. securities settlement organization DTCC (Depository Trust & Clearing Corporation) launched its securities tokenization service developed by its subsidiary DTC (Depository Trust Company) in a live environment. This was reported by The Wall Street Journal and specialized media The Trade.

This operation is not in a simulated environment but is a live operation that moves actual assets in the market. However, it is a limited operation ahead of full deployment in October, focusing on Microsoft stocks, shares of cryptocurrency-related company Circle Internet Group, Invesco QQQ Trust, State Street SPDR S&P 500 ETF Trust, iShares 0-3 Month U.S. Treasury Bond ETF, and various maturities of U.S. Treasury bonds.

Additionally, DTCC explained that JP Morgan has tokenized part of its holdings in Invesco QQQ Trust, allowing for a possible reconversion to regular stock.

Participating institutions will utilize tokenized assets for a wide range of applications, including collateral transfers, repo transactions, and stock trading. Settlements can be conducted using either DTCC's private blockchain "Hyperledger Besu" or the privacy-focused blockchain "Canton Network" led by financial institutions, which participating institutions can choose from.

The assets held by DTC exceed $114 trillion, with approximately 1.4 million circulating CUSIPs (Committee on Uniform Securities Identification Procedures). To avoid unintended risks and market disruptions while testing in a real market environment, DTCC has voluntarily narrowed the scope to about 1,000 securities, planning to transition from limited operations in July to full deployment in October.

Participating Institutions and Tokenization Mechanism

The limited operation on the 15th included financial institutions and technology providers such as JP Morgan, BlackRock, Goldman Sachs, Vanguard, and the New York Stock Exchange, totaling about 40 companies. Prior to the operation, DTCC had been advancing technical and operational verification across a wide range of sectors, including custody, asset management, brokerage firms, exchanges, and digital asset infrastructure through an industry working group composed of over 50 companies.

Currently, there are mainly two methods for blockchain-based stock trading. One is a wrapper-type structure that issues tokens mimicking the performance of the underlying asset. While anyone can buy and sell these tokens, they do not grant legal ownership or voting rights equivalent to shareholders. The other method adopted by DTCC allows tokens to be compatible with actual stocks, granting equal rights to dividends, voting, and legal ownership. However, circulation is limited to approved financial institutions.

The legal basis for the operation was a no-action letter issued by the SEC (U.S. Securities and Exchange Commission) in December 2025. The SEC granted DTC the authority to provide tokenization services to participating institutions and their clients for three years. The target assets are limited to those with high liquidity, including the constituents of the Russell 1000 (an index composed of the 1,000 largest U.S. companies by market capitalization), major index-linked ETFs, and U.S. Treasury bonds.

Frank La Salla, President and CEO of DTCC, stated, "The tokenization of assets and the use of digital blockchain is a megatrend. Our focus is on ensuring the safety and resilience of the system and finding ways to unlock trapped liquidity using new technologies."

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