The US Securities and Exchange Commission (SEC) has approved a three-year Depository Trust & Clearing Corporation (DTCC) pilot to tokenize major US securities on approved blockchains.

SEC Clears DTCC to Pilot Tokenized Versions of Traditional Securities

The US SEC has given the DTCC the green light to begin testing a tokenization service for assets held at its central securities depository, the Depository Trust Company (DTC). The no-action letter permits a three-year trial in which the DTC can issue blockchain-based representations of conventional securities without triggering enforcement action, according to a statement.

The initiative will focus on deeply traded assets, including Russell 1000 components, US Treasury securities, and major exchange-traded funds, with live operations expected to begin in the back half of 2026.

Under the program, participants will be able to convert traditional book-entry holdings into tokenized entitlements on pre-approved public or permissioned blockchains. The design allows for continuous transferability and fewer reconciliation steps while retaining the legal protections investors receive today.

DTCC will oversee the system through a centrally administered “root wallet”, enabling the depository to supervise token movements and reverse transactions if needed. The SEC has also required regular reporting on operational reliability, including token issuance volumes, system performance, and any service disruptions.

DTCC Outlines How Its Tokenization Framework Will Operate

DTCC says its tokenization model will allow DTC Participants and their end clients to access a unified service powered by its ComposerX technology stack. The goal is to create a shared liquidity layer that links traditional market infrastructure with emerging decentralized systems, supporting a financial environment that is more resilient, open, and operationally efficient.

“In partnership with our clients and the broader market, we will tokenize securities with uncompromising security, sound legal footing, and seamless interoperability, all backed by the resilience that has anchored traditional markets for decades”, said Brian Steele, Managing Director, President of Clearing & Securities Services at DTCC.

The SEC’s no-action relief permits DTC to run a controlled production environment spanning approved Layer 1 and Layer 2 networks. DTCC plans to release additional guidance in the months ahead, including wallet registration procedures, onboarding steps for participants, and criteria for evaluating which blockchain networks can join the program.

Also read: Coinbase Taps Chainlink CCIP for Cross-Chain Wrapped Tokens

Linking Traditional Finance to Blockchain Infrastructure

DTCC sees the pilot as an early step toward integrating blockchain into mainstream market plumbing. Company executives describe the effort as a pathway to more flexible collateral management, programmable asset behavior, and greater settlement efficiency.

The SEC’s decision also waives certain filing requirements for the duration of the pilot, an indication of regulatory confidence in DTCC’s risk controls and operational maturity. The approval adds to a growing list of US initiatives aimed at exploring how blockchain can modernize capital markets infrastructure.

The SEC’s posture toward digital assets has changed considerably in 2025, with the agency moving away from a predominantly enforcement-led approach and toward structured approvals and policy work that link blockchain technology to established market systems.

Much of this transition reflects Chair Paul Atkins’ “Project Crypto” agenda, which emphasizes applying securities laws consistently while creating space for regulated innovation.

One clear example of this shift came with the SEC’s decision to close its long-running inquiry into Ondo Finance. The investigation, opened in October 2023 during Gary Gensler’s tenure, focused on whether the company’s tokenized US Treasury products and its ONDO token triggered securities violations.

On December 8, the agency informed Ondo that the matter would be closed without enforcement action, marking a notable moment for the real-world asset tokenization sector.