Key Insights
- The SEC issues a rare no-action letter regarding securities tokenization on approved blockchains to the DTCC unit.
- The service will include stocks, ETFs, and fully legal US Treasuries.
- DTCC intends to introduce a small-scale launch by late 2026 through a three-year controlled framework.
The US Securities and Exchange Commission has issued a rare no-action letter to a subsidiary of the Depository Trust and Clearing Corporation, allowing it to proceed with a new market infrastructure service focused on tokenizing traditional securities.
The approval covers a controlled production rollout led by the Depository Trust Company, the DTCC unit that provides custody and settlement for much of the US securities market.
Tokenized assets tied to core US markets
According to the letter, the planned service will tokenize a defined set of highly liquid securities. These include stocks that form part of the Russell 1000 index, major index-tracking exchange-traded funds, and US Treasury bills, notes, and bonds. The digital representations will carry the same legal entitlements as their traditional counterparts.
DTC anticipates launching the service in the second half of 2026. The operations will be restricted to approved blockchain networks and will be in effect for a period of three years. The DTCC described the approach as a balanced step that strikes a balance between innovation and operational protection.
DTCC stated that the SEC’s position confirms the agency will not pursue enforcement action if the service is delivered as described. For market participants, this provides legal assurance around how tokenized securities can exist within existing clearing and settlement systems.
Frank La Salla, Chief Executive of the DTCC, said the approval reflects regulatory confidence in the program’s structure. He noted that digitized securities could support new forms of settlement, collateral use, and market access.
No-action letter signals regulatory shift.
The DTCC, which governs much of the US securities market through its clearing and settlement operations, said the no-action letter confirms the agency will not pursue enforcement if the program is carried out as proposed. Moreover, market observers consider the DTCC approval a significant regulatory message, given the firm’s central role in securities clearing and settlement in the US.
Over the past year, the SEC has taken a more open stance toward selected blockchain programs. In August, the agency issued a similar no-action letter to Double Zero, a decision that drew industry attention. Additionally, in late September, the SEC cleared registered investment advisers to work with state trust companies acting as crypto custodians.
The SEC rarely issues no-action letters; however, Chair Paul Atkins has taken a more receptive stance toward digital asset activity. Atkins, who previously worked as a crypto industry advocate, has outlined how digital asset products can fall within the agency’s existing regulatory authority.
