DTCC Receives SEC No-Action Letter for Tokenized Securities Test

DTCC subsidiary Got SEC No-Action Letter, Tokenized Services Finalized

The U.S. Securities and Exchange Commission has issued a No-Action Letter approving a controlled, three-year pilot for the Depository Trust & Clearing Corporation’s (DTCC) subsidiary, DTC. This move authorizes the tokenization of selected U.S. stocks, ETFs, and Treasuries on pre-approved blockchains, marking the strongest regulatory signal yet toward real-world asset tokenization in the U.S.

Source: DTCC-SEC-filing

SEC No-Action Letter: What Did the SEC Actually Approve? 

The SEC No-Action Letter gives DTC legal room to test blockchain-based settlement without putting multiple Exchange Act rules enforcements. Through this, for the first time, DTCC participants will be allowed to register compliant wallet addresses and settle tokenized securities through DLT instead of relying solely on the centralized DTC ledger.

Source: Press Release

Years of Blockchain Research Led to This SEC Approval

The approval is not sudden, it follows years of DTCC experimentation. Projects like:

• Project Ion (2020): Tested faster settlement via DLT

• Project Whitney (2020): Explored tokenized money market funds

• Project Lithium (2022): Simulated tokenized equity settlement with major banks

• Smart NAV (2024): Shared mutual fund NAV data on blockchain

• Treasury Collateral Pilot (2024): Tokenized government bonds across Canton Network nodes
  

DTCC’s acquisition of Securrency in 2023 further strengthened its tokenization stack. 

This groundwork shaped the current pilot model, which will record ownership on-chain while maintaining legal continuity through DTC’s nominee, Cede & Co.

Why This Decision Matters for Traditional Finance

DTCC is the backbone of global financial markets, processing over $2 quadrillion worth of securities annually. Any shift in its infrastructure carries enormous significance. 

Other than that, the current U.S. settlement system operates on T+1, meaning trades settle the next business day. This creates delays, counterparty risk, and capital lockups.

With the SEC No-Action Letter to DTCC Tokenization pilot:

• Instant settlement becomes possible

• 24/7 trading is supported

• Reconciliation errors are reduced

• Liquidity efficiency improves

DTCC’s earlier blockchain tests proved this, which showed settlement could shift from days to minutes or seconds, fundamentally upgrading financial market plumbing.

How DTCC Prepared for Blockchain Tokenization

Initially, the SEC No-Action Letter DTCC Tokenization program will cover:

• Russell 1000 stocks

• Major ETFs tracking S&P 500 and Nasdaq-100

• U.S. Treasury bills, notes, and bonds

Participation is voluntary and limited to existing DTC members such as banks and broker-dealers.

As the pilot is expected to go live in the second half of 2026 and run for three years, it includes:

• Wallet registration with compliance screening

• Token minting in a digital omnibus account

• Reversible transactions through a root wallet

• Supported L1/L2 blockchains meeting security and recovery standards

A New System Approaching: Action and Reaction

The approval has already stirred broader market and reviews. DTCC called it an “historic milestone,” while SEC Commissioner Hester Peirce praised it as a careful step toward on-chain markets. Social media hype suggests trillions crypto inflows, but analysts note the pilot remains limited and tightly controlled, with infrastructure tokens like HBAR, XRP, LINK, and Ethereum L2s, drawing early interest.

This decision is less about hype and more about infrastructure. It lays the regulatory plumbing required for U.S. markets to gradually shift toward blockchain-based settlement, without compromising security, or legal protections.