Inside DTCC’s Tokenization Service: What Moves Onchain, What Stays at DTC

he numbers around the announcement. DTCC provided custody and asset servicing for more than $114 trillion of securities in 2025, but DTCC is not putting that entire pool on chain. The initial service covers defined eligible assets: Russell 1000 securities, U.S. Treasury bills, notes and bonds, and ETFs tracking major indices.

In July, DTCC put the model into production with more than 30 firms. Securities held at DTC were converted into tokenized form and used across margin, collateral, repo, securities lending and settlement workflows. Digital conversions took place on both Canton and DTCC’s private Besu network.

From a DTCC account to a registered wallet

Start with an eligible security credited to a DTC Participant’s account.

The Participant sends DTC a tokenization instruction. Once accepted, DTCC debits the security from that Participant account and credits it to a Digital Omnibus Account on DTC's centralized ledger.

DTC then uses its Factory system to mint a token representing that security entitlement and delivers it to the Participant’s registered wallet.

How a DTC-held security becomes a token

The process also works in reverse. A Participant can send a de-tokenization instruction; DTC burns the token, removes the corresponding security from the Digital Omnibus Account and credits it back to the Participant’s conventional DTC account.

A second system, LedgerScan, watches the supported blockchains. It tracks token movements and the registered wallets holding them in near real time. For Tokenized Entitlements, LedgerScan’s record becomes part of DTC’s official books and records.

So a transfer between two registered wallets can update who DTC recognizes as holding the entitlement without requiring the normal instruction to DTC for each transfer.

What changes when the security is tokenized

The legal framework around the security remains largely familiar.

The underlying security stays within DTC’s system, and registered ownership remains in the name of Cede & Co., DTCC’s nominee. DTCC says the tokenized form maintains the same investor protections, entitlements and ownership rights as the traditional security.

What changes is how the entitlement can be held and moved.

What stays the same, what changes

A tokenized entitlement can transfer directly between registered wallets. Participants can use it in repo, reverse repo, securities lending, collateral pledges and securities transfers. Delivery-versus-payment can also take place against another tokenized asset, with that settlement occurring outside DTC rather than through DTC’s own DVP process.

The framework also allows those token transfers to happen outside DTC’s normal operating hours, subject to the applicable legal and market constraints.

July gave some concrete examples of what that looks like.

What DTCC has already run in production

At 9:00 a.m. ET on July 15, J.P. Morgan converted a position in the Invesco QQQ Trust into tokenized form.

At 10:45 a.m., J.P. Morgan posted tokenized assets to CME Group to satisfy CCP margin requirements.

Other transactions during the session covered collateral pledges, securities lending, U.S. Treasury repo, Treasury and equity DVP, equity delivery-versus-delivery and direct token transfers. DTCC says more than 30 firms participated.

What DTCC already tested in production

The range of transactions matters more than the initial conversion itself. The tokenized positions were being used inside actual financing, margin and settlement workflows during the production session.

And one of those transactions gives a particularly clear view of how Canton fits into the architecture.

A Treasury repo on Canton

During the July production activity, a tokenized U.S. Treasury was financed against Circle’s USDCx through Temple Digital Group’s RFQ platform.

DRW and HIFI traded as principals, while Marex acted as prime broker and settlement agent. The Treasury and cash legs settled atomically between the counterparties’ wallets on Canton. The underlying Treasury security continued to sit within DTC’s existing book-entry framework.

One repo, three pieces

That transaction separates the roles cleanly.

DTC continued to maintain the underlying security and entitlement framework. Canton handled the onchain assets and settlement between wallets. Temple provided the trading workflow through its RFQ venue.

It also shows why the cash side matters. DTC does not provide the payment leg for these onchain DVP transactions. In the Temple transaction, USDCx filled that role and settled atomically against the tokenized Treasury.

What October would add

July was a limited production event. October is DTCC’s expected launch of the service itself.

The size of DTC makes the project unusual, but the more useful numbers after launch will be smaller ones: how many securities are actually converted, how much value remains in tokenized form, how often those positions move between wallets, which blockchains participants use, and how much activity develops around repo, collateral and settlement.

DTC is required under the SEC relief to report several of those metrics to SEC staff quarterly, including tokenized value, transfer volumes, de-tokenizations, registered-wallet counts and the blockchains on which tokens were recorded.

For Canton, July has already provided a concrete reference point. DTCC used Canton for digital conversions during its production session, and a DTC-tokenized Treasury subsequently settled against USDCx in an atomic repo transaction on Canton.

If the October launch proceeds as expected, institutions get a repeatable route from securities held inside DTC into registered on-chain wallets and market applications.

Then we get to see how much they actually use it.