Wall Street’s $4 Quadrillion Backbone To Roll-Out Tokenized US Treasuries

Authored by Jesse Coghlan via CoinTelegraph.com,

The Depository Trust and Clearing Corporation said it is set to bring tokenized US Treasurys onchain, and plans to expand to a “broad spectrum” of assets in the future.

The DTCC said on Wednesday that it plans to “enable a subset of US Treasury securities” custodied at its subsidiary, the Depository Trust Company, to be minted on the Canton Network, a permissioned blockchain created by the fintech company Digital Asset.

“This collaboration creates a roadmap to bring real-world, high-value tokenization use cases to market, starting with US Treasury securities and eventually expanding to a broad spectrum of DTC-eligible assets across network providers,” said DTCC CEO Frank LaSalla.

The DTCC runs crucial market infrastructure for clearing, settlement and trading of US securities and reported that its subsidiaries processed $3.7 quadrillion in securities transactions last year.

Frank LaSalla speaking with CNBC’s “Crypto World” on Friday after receiving the SEC’s no-action letter. Source: YouTube

The company received a rare “no-action” letter from the Securities and Exchange Commission on Thursday that greenlit a securities tokenization service “on pre-approved blockchains for three years,” and confirmed that the agency won’t take enforcement action against DTCC if its product operates as described.

More securities to be tokenized

The trio is working to launch a minimum viable product in a controlled environment by the first half of 2026, and the DTCC stated that it will “increase the size and scope of the project in the months that follow based upon client interest.”

It added that the whole partnership roadmap between the three companies would “unfold over multiple years,” but for now it aims to provide access to “digitized financial instruments in a secure and regulated environment.”

The DTCC said last week that the SEC’s letter “applies to a defined set of highly liquid assets,” including US Treasury bills, bonds and notes, exchange-traded funds (ETF) tracking major indexes and the Russell 1000, which tracks the 1,000 largest public US companies.

The company added that it would also join the Canton Network’s governance and would take up the position of co-chair alongside Euroclear on the blockchain’s backing organization, the Canton Foundation.

Markets are moving onchain, but analyst expects a slow burn

SEC chair Paul Atkins said on Friday after his agency gave DTCC a no-action letter that the company’s initiative “marks an important step towards onchain capital markets.”

“US financial markets are poised to move onchain,” he said, adding the SEC “is prioritizing innovation and embracing new technologies to enable this onchain future.”

The same day, NYDIG global head of research Greg Cipolaro said that the tokenization of securities won’t immediately be a major boon to the crypto market, but that could change if tokenized assets are allowed to better integrate on blockchains.

Cipolaro said that traditional finance structures are still required on tokenized assets; their designs can “differ greatly,” and most are hosted on private blockchains like Canton, meaning not all can work with the wider decentralized financial system.

“In the future, one could see these RWAs being part of DeFi (composability), either as collateral for borrowing, an asset to be lent out, or for trading,” he added. “This will take time as technology develops, infrastructure is built out, and rules and regulations evolve.”