DTCC tests tokenized assets with JPMorgan, BlackRock and NYSE
The U.S. post-trade giant is showing how blockchain-based versions of stocks, ETFs and Treasurys could work inside existing market plumbing.
By Dev Ramirez · Crypto Correspondent
· 3 min read
DTCC is running a Wall Street test of tokenized assets with more than 25 firms, including JPMorgan, Goldman Sachs, BlackRock, Vanguard and the New York Stock Exchange, the company said Wednesday. For everyday investors, the test is a sign that blockchain technology is moving deeper into the systems that sit behind stock and bond trading, even if the rollout is still early.
Tokenization means creating a digital representation of an asset on a blockchain, which is a shared database used to record ownership and transactions. In this case, DTCC said the demonstration uses digital versions of assets held at The Depository Trust Company, its custody and settlement subsidiary.
JPMorgan started the event by converting the Invesco QQQ Trust, the ETF that tracks the Nasdaq-100, into a tokenized asset, according to DTCC. Other assets expected to be tokenized during the demonstration include shares of Microsoft, Circle Internet Group, the SPDR S&P 500 ETF Trust, the iShares 0-3 Month Treasury Bond ETF and U.S. Treasurys with different maturities.
Why DTCC is central to the test
DTCC is one of the least visible but most important companies in U.S. markets. It handles post-trade work, meaning the steps after a trade is placed: confirming the trade, settling it and safeguarding the securities. DTCC says its subsidiaries processed $4.7 quadrillion in securities transactions last year.
That role makes DTCC a key player in any attempt to bring blockchain-based assets into mainstream finance. A faster settlement system could shorten the time between a trade and final ownership transfer. More transparent records could make it easier to track who owns an asset. Programmable terms could let certain actions happen automatically once preset conditions are met.
Supporters of tokenization also point to potential cost savings, broader access for investors and easier cross-border use. DTCC is not presenting Wednesday’s event as a full market launch. The company said the exercise is designed to show how tokenized assets could work across collateral, repo, equities, margin and asset transfers while still using existing market infrastructure.
Legacy finance faces crypto-native competition
The test comes after years of industry discussion about tokenization and limited broad adoption. During that period, crypto-focused tokenization companies such as Ondo and Securitize have gained attention through partnerships with major financial firms, including BlackRock.
Nadine Chakar, global head of DTCC Digital Assets, said in a video statement that the event marks “the beginning of a long journey” and is meant to show that traditional market systems and newer technology can work together. She said DTCC hopes the work will help create a foundation for a scalable launch in October.
Brian Steele, DTCC’s president of clearing and securities services, said in a statement that the company is connecting traditional finance with decentralized finance, a term for blockchain-based financial systems. He said DTCC’s tokenization service could create “increased efficiency, deeper liquidity and new ways to move and use assets.”
The Wall Street Journal first reported the planned event. A DTCC spokesperson confirmed the participation of Goldman Sachs, BlackRock, Vanguard and the New York Stock Exchange.
This story draws on original reporting from CNBC.
