The United States Securities and Exchange Commission (SEC) has implicitly permitted the tokenization and trading of certain stocks and other securities on blockchains.
(DTCC), the world’s largest securities settlement system, said Thursday that a subsidiary, Depository Trust Co. (DTC), has received a no-action letter allowing it to offer tokenization service on approved blockchains for three years.
Tokenization is the process of representing stocks, bonds and other real-world assets (RWA) as digital tokens that can be bought, sold and traded on blockchains, with the aim of achieving greater efficiency and faster settlement.
Some of the biggest names in traditional finance (TradFi), including JPMorgan and BlackRock, have developed projects in this area, demonstrating the institutional investment potential they can attract in blockchain finance.
The Depository Trust Co. authorization applies to constituents of the Russell 1000 Index, exchange-traded funds (ETFs) that track major indexes, and U.S. Treasuries. It plans to begin rolling out the service in the first half of 2026.
A no-action letter is a formal response from the agency to a company indicating that the regulator will not take any enforcement action for a proposed activity.
