DTCC launches tokenization service for 34 securities on Canton Network and private Besu chain

The Depository Trust & Clearing Corporation, which sits at the center of U.S. securities clearing, settlement and custody, has put its tokenization service into production. The launch is seen as a notable step toward placing stocks, bonds and funds on blockchain infrastructure.

The service runs on the Canton Network and on DTCC's own private Besu blockchain. At launch it supports selected large-cap stocks from the Russell 1000 index, exchange-traded funds, and U.S. Treasury bills, notes and bonds. According to DTCC's product website, 34 securities are eligible, representing roughly $30 trillion in market value, a spokesperson told CoinDesk. DTCC's depository holds more than $114 trillion in securities.

Each token is backed one-for-one by a security held at the Depository Trust Company, a DTCC subsidiary. That company continues to keep the official ownership records, even when tokens move between registered wallets. This sets the model apart from synthetic stock tokens, which track share prices without giving holders ownership of the underlying securities. Eligible firms can convert securities into tokens during business hours, with DTCC aiming for processing times of 15 minutes or less. Once tokenized, assets can move between registered wallets around the clock, subject to compliance restrictions.

Twenty participants have signed agreements to access the service. They include Bank of America, Barclays, Citi, Fidelity Investments, JPMorgan, Morgan Stanley, Citadel Securities, State Street and UBS. DTCC said more firms are expected to join over time.

The company's road map calls for adding the Stellar network and Circle's Arc blockchain in 2027, along with broader corporate-action support, tools for settling transactions with digital cash, and the use of tokenized securities as collateral. The rollout follows a demonstration earlier this year and plans announced in May, and builds on a December no-action letter from the U.S. Securities and Exchange Commission that allowed DTCC to tokenize a defined set of securities.

Frank La Salla, DTCC's president and CEO, said the launch marks the culmination of years of work to bring tokenized securities into a regulated framework supported by trusted market infrastructure. Citi analysts have projected that tokenized securities could become a $5.5 trillion market by 2030. Nasdaq and the New York Stock Exchange are also developing tokenized securities trading infrastructure, while NYSE parent Intercontinental Exchange is set to operate a blockchain-based trading venue with crypto exchange OKX under the SEC's innovation exemption.