The U.S. Securities and Exchange Commission (SEC) has implicitly allowed the tokenization and trading of certain stocks and other securities on blockchain platforms.
On Thursday, the Depository Trust & Clearing Corp. (DTCC), the largest securities settlement system globally, announced that its subsidiary, the Depository Trust Co. (DTC), received a no-action letter from the SEC, permitting it to provide a tokenization service on approved blockchains for a period of three years.
Tokenization refers to the process of converting stocks, bonds, and other real-world assets (RWAs) into digital tokens that can be traded on blockchains, aiming for increased efficiency and faster settlements.
Major players in traditional finance (TradFi), such as JPMorgan and BlackRock, are actively working on projects in this space, indicating the potential for substantial institutional investment in blockchain finance.
The authorization for the Depository Trust Co. covers constituents of the Russell 1000 index, exchange-traded funds (ETFs) linked to major indexes, and U.S. Treasuries. The service is expected to launch in the first half of 2026.
A no-action letter is a formal communication from the agency to an entity, indicating that the regulator will not pursue enforcement actions concerning a proposed activity.
