SEC issues no-objection letter! DTCC tokenization approved, Russell 1000 stocks go on-chain

The U.S. Securities and Exchange Commission (SEC) has issued a no-action letter to a subsidiary of the Depository Trust & Clearing Corporation (DTCC), allowing it to provide securities market tokenization services. This will enable the tokenization of assets held in custody by DTC, a DTCC subsidiary, in a controlled production environment. The assets include the Russell 1000 index, ETFs tracking major indices, U.S. Treasury securities, bonds, and bills with high liquidity, with a planned launch in the second half of 2026.

DTCC’s Blockchain Transformation at the Heart of Wall Street Clearing

(Source: SEC)

DTCC operates critical market infrastructure, providing clearing, settlement, and transaction services for U.S. securities, handling securities transactions worth trillions of dollars annually. When this core Wall Street infrastructure provider chooses to embrace tokenization, it signifies an official recognition of blockchain technology by the traditional financial system. Previously, tokenization was mainly driven by crypto-native companies. DTCC’s entry will bring institutional-level reliability and compliance to security tokenization.

The issuance of the no-action letter demonstrates SEC Chair Paul Atkins’s openness to cryptocurrency. Atkins, a former crypto advocate, outlined how crypto products could be incorporated under SEC jurisdiction. This stance contrasts sharply with former Chair Gary Gensler’s strict enforcement approach. In recent months, the SEC has issued two no-action letters to DePIN (Decentralized Physical Infrastructure Networks) projects, and in late September, it cleared obstacles for investment advisors using state trust companies as cryptocurrency custodians.

“The DTC will be able to tokenize real-world assets, and the digital versions will have the same rights, investor protections, and ownership as traditional assets,” the statement said. This means that tokenized securities are not “shadow assets” or “derivatives,” but are digitally equivalent to paper securities. Investors holding tokenized stocks will enjoy the same voting rights, dividend rights, and other shareholder privileges. This equivalence is key to mainstream acceptance of security tokens.

The no-action letter allows DTC to provide services on pre-approved blockchains but does not specify which blockchains. This choice will greatly influence the industry landscape, with public blockchains like Ethereum, Solana, and Avalanche all vying to become the preferred platform for institutional security tokenization. The blockchain selected by DTC will gain significant business opportunities and technical validation.

Market Impact of Tokenizing the Russell 1000 and $36 Trillion of U.S. Treasuries

DTC will tokenize the Russell 1000 index, ETFs tracking major indices, U.S. Treasury securities, bonds, and bills. The Russell 1000 covers the 1,000 largest publicly traded U.S. companies, representing about 92% of the total U.S. stock market capitalization, including giants like Apple, Microsoft, Amazon, and others. Tokenizing these stocks means nearly all major U.S. listed companies will have digital versions.

The impact of tokenizing U.S. Treasuries is even more profound. With a total outstanding amount exceeding $36 trillion, U.S. Treasuries are the largest and most liquid financial market globally. Tokenizing Treasuries could significantly improve their efficiency as collateral. In traditional finance, using Treasuries as collateral involves complex transfer and registration procedures. Tokenization would enable instant transfer and pledge on the blockchain, greatly enhancing capital efficiency.

Three Transformative Benefits of Security Tokenization

Enhanced Collateral Liquidity: Tokenized securities can serve as collateral in DeFi protocols, unlocking liquidity from trillions of dollars of idle assets

24/7 Trading: Breaking traditional trading hours, enabling global investors to trade anytime

Programmability Innovation: Smart contracts facilitate automatic dividend distribution, automatic exercise of voting rights, conditional trading, and other new functionalities

CEO LaSalla emphasized these revolutionary benefits, demonstrating that DTCC’s long-term vision for tokenization is not just a technical upgrade but a redefinition of how securities markets operate. The scheduled launch in the second half of 2026 provides ample preparation time, including technological integration, participant training, and compliance setup. Once launched, this service will mark Wall Street’s official entrance into the blockchain era.