The Depository Trust & Clearing Corporation (DTCC) has achieved a major milestone in the evolution of financial markets. Its subsidiary, the Depository Trust Company (DTC), recently received a No-Action Letter from the Securities and Exchange Commission (SEC). This authorization allows DTC to tokenize specific assets currently in its custody, marking a critical step forward in the integration of traditional finance (TradFi) and decentralized finance (DeFi).
This regulatory approval enables DTCC to create a bridge between established financial systems and emerging blockchain technologies. The development carries significant implications for financial markets and represents years of careful planning and coordination with regulators.
In an historic milestone, DTC received a No‑Action Letter from the SEC to tokenize certain DTC‑custodied assets. By leveraging blockchain, DTCC aims to bridge TradFi and DeFi, advancing a more resilient, inclusive and efficient global financial system. https://t.co/yYNaHfvjcS pic.twitter.com/E4W47rWBIc
— DTCC (@The_DTCC) December 11, 2025
Understanding DTCC’s Tokenization Service
DTCC’s new tokenization service transforms traditional financial assets into digital tokens on blockchain networks. The service will maintain all legal and economic rights associated with the original assets while adding new technological capabilities. DTC plans to launch the service in the second half of 2026, focusing initially on highly liquid assets.
The first wave of tokenized assets will include stocks from the Russell 1000 index, ETFs tracking major indices, and U.S. Treasury securities. These digital tokens will carry the same CUSIP identifiers as their traditional counterparts, allowing them to move freely between conventional and blockchain ecosystems.
Frank La Salla, President and CEO of DTCC, emphasized the significance of this development: “Our new tokenization service will serve as the bridge between TradFi and DeFi, offering the same investor protections and ownership rights as traditional book-entry securities currently held in custody by DTC.”
DTCC has confirmed that the tokenization service will support multiple blockchain networks that meet the standards outlined in the SEC’s No-Action Letter. This approach ensures flexibility and interoperability across different blockchain ecosystems.
Key Benefits of Asset Tokenization
The tokenization service offers several major advantages to market participants. First, it provides access to both traditional and blockchain-based liquidity pools. Assets can move seamlessly between ecosystems, creating new opportunities for investors and traders.
Second, tokenized assets will enable 24/7 trading and settlement, a significant improvement over traditional market hours. This feature supports global market access and addresses liquidity needs across different time zones.
Third, DTCC’s smart contracts will automate many processes that currently require manual intervention. The initial implementation will focus on compliance and distribution controls, with plans to expand to other aspects of the trade lifecycle in future releases.
Brian Steele, Managing Director and President of Clearing & Securities Services at DTCC, noted:
Trust, scale, resiliency and risk management are core tenets of how DTCC manages its infrastructure today. We’ll need to achieve the same levels in all these areas as we integrate TradFi and DeFi.
Brian Steele, Managing Director and President of Clearing & Securities Services at DTCC
Additionally, tokenized assets will incorporate comprehensive controls to meet regulatory compliance requirements. These include the ability to mint, burn, transfer, clawback, pause, and freeze tokens when necessary – features essential for maintaining market integrity.
The Future of Financial Markets
DTCC’s tokenization initiative represents a significant step toward modernizing financial infrastructure. By bringing traditional assets onto blockchain networks, DTCC aims to create a more resilient, inclusive, and efficient global financial system.
While full convergence between TradFi and DeFi may still be years away, the momentum is building. A recent industry survey indicated that over half of financial professionals believe traditional and decentralized finance will coexist for at least the next decade.
As financial markets continue to evolve, DTCC’s tokenization service provides a regulated pathway for innovation. The collaboration between established financial institutions, regulators, and blockchain technology providers will be essential to realizing the full potential of this transformation.
The tokenization of real-world assets marks just the beginning of a broader financial evolution. As these technologies mature and adoption increases, we can expect further integration between traditional and digital financial systems, creating new opportunities for market participants and expanding access to capital markets globally.
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