DTCC protects more than $114 trillion in securities, making it one of the most important parts of the financial market infrastructure. Every day it records ownership and settles transactions involving stocks, bonds and other securities. Instead of creating new digital assets, DTCC’s system converts existing securities into blockchain-based “digital twins” that retain the same legal ownership, dividend and management rights as the underlying assets.
This distinction sets DTCC’s approach apart from many tokenized equity offerings available today.
Some crypto platforms issue tokenized “wrappers” that reflect a share’s price, but don’t necessarily give investors the legal rights associated with owning the underlying shares.
DTCC’s model instead allows institutions to convert existing securities between traditional electronic records and blockchain-based tokens without changing ownership.
“They’re the ones who shift from one settlement regime to the next,” Mark Wendland, CEO of Canton Strategic Holdings, said in an interview. “I cannot understate the importance of a company like DTC piloting and executing these real transactions given the role they play in the U.S. financial markets.”
During the day, the participants demonstrated several use cases. JPMorgan converted holdings of the Invesco QQQ Trust ETF into tokenized assets before using tokenized collateral to meet central counterparty margin requirements at CME Group. DTCC also processed tokenized treasury transactions, equity trades and collateral, while the SPDR S&P 500 ETF Trust, one of the world’s largest ETFs, was also tokenized during the event.
