Bringing blockchain technology into the system could make tokenized assets part of mainstream market infrastructure rather than a separate market operating alongside it.
Tokenization promises to make financial assets easier to transfer, settle and use as collateral. While banks and asset managers have spent years experimenting with blockchain-based securities, connecting those assets to the systems that already underpin trillions of dollars in transactions could help bring the technology into everyday market operations.
Analysts at Citi projected tokenized securities will become a $5.5 trillion market by 2030 as more financial institutions adopt blockchain technology.
Bringing traditional securities onchain
“Today marks the culmination of years of work to bring tokenized securities into a regulated framework supported by trusted market infrastructure,” said Frank La Salla, DTCC’s president and CEO.
“By extending DTC’s resiliency, governance and operational standards into digital markets, we are establishing the foundation for responsible institutional adoption at scale.”
Twenty participants have signed agreements to access the service, including Bank of America, Barclays, Citi, Fidelity Investments, JPMorgan, Morgan Stanley, Citadel Securities, State Street and UBS. DTCC said more firms will join over time.
Eligible firms can convert securities into tokens during business hours, with DTCC targeting processing times of 15 minutes or less. Once tokenized, the assets can move between registered blockchain wallets around the clock, subject to compliance restrictions.