The Depository Trust & Clearing Corporation (DTCC), the financial market infrastructure that processes roughly $10 trillion in securities transactions daily, has outlined its vision for tokenized securities, emphasizing interoperability and rejecting the creation of closed, proprietary systems. Nadine Chakar, Global Head of DTCC Digital Assets, stated during a virtual forum that the firm is "not building walled gardens" and values the ability for digital assets to move seamlessly between blockchains without added risk or cost.
Chakar acknowledged that while traditional financial messaging standards may become a "relic of the past," they provide a necessary foundation as new Layer 1 blockchains emerge constantly. The DTCC's approach is cautious, factoring in significant cybersecurity risks highlighted by incidents like North Korean cyberattacks that have stolen billions.
The firm's initial tokenization infrastructure will be built on the Canton Network, a permissioned blockchain designed for financial institutions where transaction validation is currently invite-only. DTCC also plans to utilize "AppChain," a permissioned, Ethereum-compatible network. Brian Steele, DTCC Managing Director and President of Clearing and Securities Services, explained the choice of Canton was driven by client demand for after-hours financing to support market makers and liquidity.
Steele affirmed DTCC's commitment to connecting to multiple blockchains in the future, based on evaluation criteria including resiliency, security, and client demand. "We want our clients to have a choice," he said.
This strategy has sparked debate within the crypto community. Critics, including crypto lawyer Gabe Shapiro, argue that DTCC's tokenized securities are intrinsically a walled garden because the tokens represent claims on securities already safeguarded by DTCC, not native blockchain issuances. With DTCC affiliate Cede & Co. holding legal title to 83% of all publicly traded stock in the U.S., Shapiro notes, "You don't own the stock that is 'tokenized'—Cede and DTCC do." Conversely, Roger Bayston of Franklin Templeton noted that the "securities business is by construct permissioned," defending the approach.
