The Depository Trust & Clearing Corporation (DTCC) is pushing to render the full 1.4 million securities it holds digitally eligible, a move intended to let participants shift instruments between legacy and tokenized forms within minutes.
DTCC’s roadmap centers on a controlled tokenization approach that preserves its role as central ledger operator. The plan relies on a “burn-and-mint” model that removes a traditional entry from DTCC’s books and issues a corresponding digital token on a permissioned chain, a design DTCC says helps avoid the fragility of cross-chain locking.
To power that, the firm is leveraging the Canton Network and a DTCC AppChain built on an Ethereum-compatible Hyperledger Besu, and it is evaluating integrations with off‑chain oracle and payment providers such as Chainlink and Fnality to support collateral, lending and repo workflows.
DTCC has already rolled out a Digital Securities Management platform and a digital collateral management tool to underpin real‑time optimization and settlement experiments. Those platforms are being positioned as the operational foundation for broader on‑chain processing.
The Securities and Exchange Commission issued a no‑action letter in December 2025 that cleared a regulated pilot pathway, a necessary precondition for wider use. Under the authorization, a multi-year pilot focused on U.S. Treasuries, Russell 1000 stocks and ETFs is slated to launch in late 2026 and may run for up to three years on pre‑approved blockchains.
How the program will work and the technology stack
Key process deadlines are set: cash trading processes must meet digital requirements by the end of 2026, and repo workflows by June 30, 2027. The pilot will operate with registered wallets and allowlisted participants to maintain a permissioned, compliance‑centric environment.
“A ‘burn‑and‑mint’ model preserves DTCC control over the asset lifecycle,” the roadmap states, framing the approach as a security and compliance tradeoff versus open bridging models.
DTCC projects the shift could materially free liquidity by shortening settlement from T+2 toward near‑instant processes, a change that the firm says could unlock roughly $100 billion in trapped collateral and increase capital efficiency across a system that settles about $2.3 quadrillion of transactions annually.
That upside is paired with operational complexity: permissioning, interoperability across pre‑approved chains, oracle integrity and settlement finality will be practical constraints as tokenized instruments scale.
Tokenization promises faster intraday collateral moves and lower margin friction, but access will initially be limited to approved participants and networks. Custody desks should budget for integration work with DTCC’s AppChain and for monitoring how digital collateral tools interact with existing repo and securities‑lending stacks.
Investors and infrastructure teams will watch the late‑2026 pilot and the end‑2026 cash deadline as the first operational tests of the thesis: if tokenized settlement meaningfully reduces collateral drag and operational cost without introducing new systemic risk, adoption will accelerate; if not, tokenization will remain a niche overlay.
The pilot period will be the practical test of whether this program delivers the capital and efficiency gains DTCC projects, and whether regulated participants can reconcile on‑chain speed with off‑chain compliance and finality.
