SEC Allows DTCC to Tokenize U.S. Securities on Blockchain

The U.S. Securities and Exchange Commission issued a no-action letter on Thursday to The Depository Trust Company, a subsidiary of the Depository Trust and Clearing Corporation, allowing it to tokenize select U.S. securities on preapproved blockchain networks starting in the second half of 2026. The three-year authorization covers highly liquid assets, including stocks from the Russell 1000 index, exchange-traded funds tracking major indexes, and U.S. Treasury bills, bonds, and notes, marking a key step in integrating blockchain technology with traditional financial markets.

The no-action letter indicates that the SEC will not pursue enforcement against the proposed activities if they proceed as outlined, providing regulatory clarity for the initiative. Tokenization involves creating digital representations, or "digital twins," of these assets on blockchains, which will maintain the same ownership rights, investor protections, and entitlements as their conventional forms. The service will operate in a controlled production environment across Layer 1 and Layer 2 blockchain providers, initially accessible only to Depository Trust Company participants and their clients. Further...