The US Depository Trust & Clearing Corporation (DTCC) conducted a pilot transaction on May 15 (local time) converting stocks and US Treasuries held at its subsidiary depository DTC into digital tokens for actual financial transactions. Over 30 traditional financial institutions and digital asset companies participated, including BlackRock, Goldman Sachs, JPMorgan, the New York Stock Exchange (NYSE), and Circle. The tokenized assets included Microsoft stock, Circle stock, Invesco QQQ ETF, SPDR S&P 500 ETF, and US Treasuries. Analyst Yang Hyun-kyung from iM Securities stated in a May 21 report that the October scheduled launch of DTCC's tokenization service will mark an important turning point for the stock tokenization market, shifting from wrapper-type product structures toward integration with traditional financial market infrastructure.
DTCC Pilot Includes BlackRock, Goldman Sachs, and 30+ Institutions
The May 15 (local time) pilot transaction involved more than 30 traditional financial institutions and digital asset firms. Participants included BlackRock, Goldman Sachs, JPMorgan, the New York Stock Exchange (NYSE), and Circle. The tokenized assets covered Microsoft stock, Circle stock, Invesco QQQ ETF, SPDR S&P 500 ETF, and US Treasuries.
DTC Receives SEC No-Action Letter for Tokenization Service
DTC received a no-action letter from the US Securities and Exchange Commission (SEC) in December last year, permitting operation of its tokenization service for the next three years. DTC provides custody and asset management services for approximately $114 trillion in securities. The initial tokenization targets include Russell 1000 constituent stocks, major index ETFs, and US Treasuries — securities with high liquidity.
Wrapper-Type Tokens vs DTC Tokenization Structure
Analyst Yang Hyun-kyung noted that DTCC's approach differs structurally from existing wrapper-type stock tokens. Wrapper-type tokens involve an issuer purchasing and holding actual stocks, then issuing separate tokens linked to stock prices. Token investors hold redemption claims against the issuer rather than direct shareholder status in the listed company, exposing them to the issuer's credit risk with potential limitations on voting rights and dividends.
DTC's service converts already-deposited securities between ledger form and token form. After tokenization, the same legal ownership, dividend rights, and voting rights as the original securities are maintained. Yang explained that this approach does not create new claim products but extends the recording and transfer methods of securities to blockchain within DTC's existing custody and rights management framework.
Stock Tokenization Market Reaches $1.85 Billion
The global real-world asset (RWA) market excluding stablecoins stands at approximately $34.8 billion. Within this, the stock tokenization market represents about $1.85 billion, remaining in an early stage. Yang stated that DTCC's commercialization of tokenization services can serve as an opportunity for the wrapper-type tokenization market centered on virtual asset companies to expand into a securities tokenization market integrated with institutional financial infrastructure.
FAQ
What did DTCC do on May 15 (local time)?
DTCC conducted a pilot transaction converting stocks and US Treasuries held at its subsidiary depository DTC into digital tokens for actual financial transactions. Over 30 institutions participated, including BlackRock, Goldman Sachs, JPMorgan, NYSE, and Circle. Tokenized assets included Microsoft stock, Circle stock, Invesco QQQ ETF, SPDR S&P 500 ETF, and US Treasuries.
When did DTC receive SEC approval for its tokenization service?
DTC received a no-action letter from the SEC in December last year, permitting operation of its tokenization service for the next three years. The service is scheduled to launch in October.
How does DTC's tokenization differ from wrapper-type tokens?
Wrapper-type tokens involve an issuer holding actual stocks and issuing separate tokens linked to stock prices, giving investors redemption claims rather than direct shareholder status. DTC's service converts already-deposited securities between ledger and token form, maintaining the same legal ownership, dividend rights, and voting rights as the original securities within DTC's existing custody framework.
