- SEC approved a three-year blockchain pilot for DTCC.
- Blockchain integration promises increased liquidity and 24×7 trading.
- Potential industry shift with regulatory scrutiny expected.
The U.S. SEC has granted a three-year no-action letter to DTCC, allowing custody of tokenized stocks and RWAs on approved blockchains starting the second half of next year..
This initiative by DTCC represents a pivotal movement towards blockchain integration in traditional finance, potentially transforming asset custody and settlement processes. Immediate market effects are yet to be observed.
The U.S. Securities and Exchange Commission granted the Depository Trust & Clearing Corporation (DTCC) a no-action letter, enabling it to custody and tokenize real-world assets on a blockchain. This three-year pilot, authorized by the SEC, is a notable development for the DTCC, a central figure in the U.S. financial settling system. The program is expected to enable DTCC to support innovative services on pre-approved blockchain networks, set to launch in the second half of next year.
Michael Winnike, Global Head of Strategy & Market Solutions, DTCC Clearing & Securities Services, expressed confidence in expanding record-keeping efforts to blockchain networks during this pilot phase.
“We expect our tokenization service to support various blockchain networks.”
Blockchain Integration to Transform Financial Markets
Did you know? DTCC’s pilot is a rare example of a major U.S. financial entity receiving green light from SEC for blockchain use, highlighting a potential industry shift similar to previous DLT experiments in repos and derivatives.
DTCC has previously explored distributed ledger technology (DLT) for clearing and settlement, notably across derivatives and repos. This initiative mirrors past efforts yet marks a scaled approach in integrating with blockchain for asset custodianship. Historically, such initiatives have occurred through permissioned blockchains, maintaining DTCC’s role as the core record-keeper.
Experts anticipate this move could lead to regulatory and technological transformations within the financial sector. Blockchain integration can result in significant process enhancements, including shortened settlement periods and enhanced transaction efficiency. As DTCC prepares for the rollout, the financial markets await potential reshaping, combining old industry frameworks with blockchain advantages.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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