DTC Receives SEC Confirmation for Tokenization Pilot Program

The tokenization has just received its biggest institutional boost within the US financial system. The Depository trust Company (DTC), an entity that safeguards more than $100 trillion in securities and operates as a central part of the stock market, obtained confirmation from the staff of the Securities and exchange Commission (SEC) that allows it to move forward with a pilot program to issue digital representations of assets it already holds.Although the approval is not absolute, it does establish a formal framework that, for the first time, brings the regulated market closer to a distributed registry scheme under federal supervision.

A Limited Permit That starts a New Regulatory Phase

The SEC notice, dated December 11, does not legally approve the model or guarantee future authorizations. It only indicates that, under the conditions presented, the organization will not recommend enforcement actions as long as the test remains within strict parameters: limited scope, authorized participants and highly liquid assets.

The pilot will allow certain securities-including Russell 1000 stocks, U.S. Treasury securities, and highly liquid ETFs-to be represented by tokens issued on an approved blockchain. Though, the underlying assets do not change registration, remaining on the traditional books under the name Cede & Co.,the trust vehicle of DTCC.

This approach avoids changing the legal structure of the securities ownership system, one of the most sensitive parts of the US market, and places innovation exclusively in the technological layer that manages internal rights of participants.

How the Pilot Program Will Work

The proposal describes two internal tools: Factory, responsible for creating tokens and assigning them to authorized wallets; and LedgerScan, a system that tracks all transactions on supported chains, turning that data into the official record of tokenization within DTC systems.