The US Securities and Exchange Commission (SEC) has granted the Depository Trust and Clearing Corporation (DTCC) a significant “no-action” letter, enabling it to introduce a new tokenization service for securities.

The DTCC revealed that its subsidiary, the Depository Trust Company, has received approval to initiate “a new service to tokenize real-world, DTC-custodied assets in a controlled production environment.”

Overview of Tokenization Initiative

The tokenization will focus on a range of highly liquid assets, including the Russell 1000 index, exchange-traded funds (ETFs) tracking major indexes, and US Treasury bills and bonds, with plans for service rollout slated for the second half of 2026.

The DTCC plays a pivotal role in managing market infrastructure, facilitating the clearing, settlement, and trading of US securities. The SEC’s no-action letter offers an important endorsement, indicating that the agency will not pursue enforcement actions should the product function as intended.

“I want to thank the SEC for its trust in us,” said Frank La Salla, the CEO of DTCC. “Tokenizing the US securities market has the potential to yield transformational benefits such as collateral mobility, new trading modalities, 24/7 access, and programmable assets.”

In an announcement, the DTCC stated that the no-action letter enables its subsidiary to provide a tokenization service for DTC Participants and their clients on pre-approved blockchains for a duration of three years. The digital assets will possess equivalent entitlements, investor protections, and ownership rights as their traditional versions.

The SEC seldom issues no-action letters, and Paul Atkins, the SEC chair, has recently shown a more favorable attitude toward the crypto industry. Over recent months, the SEC has allocated two additional no-action letters to decentralized physical infrastructure network (DePIN) crypto projects and clarified pathways for investment advisers to utilize state trust companies as crypto custodians.