The Depository Trust & Clearing Corp., the U.S. securities clearing and settlement giant, is set to conduct its first limited production trades of tokenized stocks and Treasurys on Wednesday.
JPMorgan successfully tokenized a portion of its Invesco QQQ Trust holdings, while retaining the ability to convert them back to traditional shares, DTCC confirmed. Shares of Microsoft, Circle, State Street SPDR S&P 500 ETF Trust, and iShares 0-3 Month Treasury Bond ETF are also among the first assets to be tokenized, The Wall Street Journal first reported.
The tokens will be recorded on blockchain infrastructure at the clearinghouse and made available for trading. Rather than using a wrapper that merely tracks a stock's performance, DTCC's approach makes tokenized shares interchangeable with traditional shares, carrying the same ownership, dividend, and governance rights.
The tokenized assets will be used for collateral transfers, repo transactions, and equity trades, settling on either DTCC's Hyperledger Besu network or Canton Network.
"The tokenization of assets and digital blockchain usage are a megatrend," Frank La Salla, president and chief executive of DTCC, told the WSJ. "What we really focus on is safety of the system, resiliency of the system, and working on ways in which we can free up trapped liquidity by using this new technology."
