DTCC Tokenization Service Launches with Canton Network

The Depository Trust & Clearing Corporation (DTCC) is set to launch its tokenization service in October, using two blockchain networks at launch: Canton and LFDT Besu. The service will initially handle part of the securities volume that the DTCC moves every year, with a value of $4.7 quadrillion.

The DTCC's subsidiary DTC holds the positions, and these custodied positions are now getting a digital copy through tokenization. This means an existing security is additionally recorded as a transferable entry on a blockchain.

US Treasury securities held in DTC custody will be the first to be tokenized, followed by other eligible assets. The launch comes after a stress test in July, which successfully ran real transactions through the new pipeline.

The SEC has granted the DTCC a no-action letter, but with an expiry date of three years after the service goes live. This permission is not a permanent framework and may be subject to change in the future.