DTCC Announces Live Tokenization Demonstration for Custodial Securities

The Depository Trust & Clearing Corporation (DTCC) announced on June 15 (local time) via X that it is approaching a live demonstration of tokenization using assets held at The Depository Trust Company (DTC), DTCC's subsidiary depository institution. The demonstration will convert custodial securities into blockchain-based digital assets. DTCC described tokenization as the process of representing traditional market assets such as stocks and bonds in digital form on a blockchain, with tokens representing actual ownership.

DTCC Defines Tokenization Process

DTCC explained tokenization as "the process of implementing physical assets that have been traded in traditional markets, such as stocks and bonds, in digital form on a blockchain, and making tokens represent actual ownership." The organization posted on X: "DTCC is approaching a live demonstration of tokenization using assets held at The Depository Trust Company (DTC). To underscore the significance of this milestone, we break down what tokenization is, how it works, and how it may help enhance the efficiency, accessibility, and…"

DTCC Outlines Procedural Steps for Asset Tokenization

DTCC disclosed specific procedures for the tokenization process. First, assets to be tokenized are selected from stocks, government bonds, and funds, then locked to prevent double-spending. Next, a blockchain is selected and smart contracts are implemented to define token functions including total supply, distribution control, minting, burning, and cancellation.

In the following step, wallets are set up on the selected blockchain. Each wallet has a unique identifier and security access permissions, allowing owners to directly manage assets or delegate management to authorized third parties such as custodians or asset managers. Tokens representing the locked assets are then issued and allocated to registered wallets.

DTCC emphasized that "issued tokens can be used for transfers, collateral utilization, and trading, and may be relatively free from traditional market trading hours or existing procedures."

FAQ

What did DTCC announce on June 15?

DTCC announced on June 15 (local time) via X that it is approaching a live demonstration of tokenization using assets held at The Depository Trust Company (DTC), its subsidiary depository institution.

What process did DTCC outline for tokenization?

DTCC outlined a process that includes selecting assets (stocks, government bonds, funds), locking assets to prevent double-spending, selecting a blockchain, implementing smart contracts to define token functions, setting up wallets with unique identifiers and security permissions, and issuing tokens to registered wallets.