The U.S. Securities and Exchange Commission approved a three-year pilot that allows the Depository Trust Company, part of the DTCC, to record U.S. securities on selected blockchains using ‘registered’ wallets, according to a no-action letter dated Dec. 11, 2025.
The SEC granted relief through a no-action letter that creates a regulatory sandbox for a defined experiment rather than a blanket endorsement of tokenization. The pilot will run for three years and initially covers Russell 1000 stocks, exchange-traded funds (ETFs), corporate bonds and U.S. Treasury securities. Tokenized entitlements are digital representations of traditional securities that mirror ownership rights on a blockchain; they are intended to carry the same legal claims as their conventional counterparts.
The DTCC enters the project as a systemically important market utility: it manages custody for more than $100 trillion in assets and processed $3.7 quadrillion in securities transactions in 2024. The SEC’s calibrated approach aims to allow innovation while ensuring that transfers on-chain retain the investor protections and entitlements that underpin market confidence.
The pilot requires the use of pre-approved, permissioned chains rather than public, permissionless networks. A central element will be the DTCC’s AppChain, built on LF Decentralized Trust’s Hyperledger Besu—a private, Ethereum-compatible environment that supports enterprise controls. ‘Registered’ wallets will be linked to DTCC participants, creating a closed-loop custody model in which the DTCC holds the root record of ownership.
Technological infrastructure and operational benefits
The DTCC is integrating enterprise-grade tooling and industry collaborations: projects mentioned include its tokenized collateral management platform, work with Chainlink for corporate actions processing, and uses of The Graph for blockchain data access. The organization has participated in cross-industry tests such as the Canton Network. There is speculative commentary in the market noting patents and discussions that suggest assets like XRP and XLM could be considered as base-layer liquidity tools within such a controlled tokenized ecosystem, but that point remains conjectural rather than a stated program objective.
Operationally, the pilot seeks to shorten settlement timeframes and increase capital efficiency by enabling near-instant, 24/7 transfers versus the conventional T+2 cycle. Expected benefits include lower operational costs, reduced counterparty exposure, and improved collateral mobility—advantages that could materially affect treasury operations and trading desks if proven at scale.
At the same time, the permissioned design constrains pseudonymity and open DeFi mechanics; market participants should view this as an institutional-grade bridge between TradFi infrastructure and blockchain mechanics, not a wholesale replacement of existing systems. The SEC’s targeted relief intends to keep investor protections intact, which should limit legal risk if participants adhere to the pilot’s scope and controls.
