What Is DTCC’s Tokenization Service?
The Depository Trust & Clearing Corporation (DTCC) is the backbone of the global financial system. Its subsidiary, the Depository Trust Company (DTC), custodies assets valued at over $114 trillion and processes securities transactions worth quadrillions of dollars annually. When DTCC moves, the entire financial industry pays attention.
On May 4, 2026, DTCC announced a major milestone: the formation of an Industry Working Group of more than 50 firms spanning traditional finance and decentralized finance to drive the development of DTC’s tokenization service. The service will enable real-world, DTC-custodied assets to be represented as digital tokens on approved blockchains with the same entitlements, investor protections, and ownership rights as assets held in traditional form.
Backpack is one of the 50+ firms in the Working Group. Other participating firms include BlackRock, Goldman Sachs, J.P. Morgan, Citi, Morgan Stanley, Robinhood, Kraken, Circle, and Ondo Finance. The group spans custodians, asset managers, brokers, trading venues, and crypto-native platforms.
Key Takeaways
- Backpack is part of DTCC’s 50+ firm Industry Working Group — collaborating directly on the development of DTC’s tokenization service alongside major Wall Street banks and crypto firms.
- Initial limited production trades are planned for July 2026, with a full service launch targeted for October 2026.
- The tokenization service covers highly liquid assets, including Russell 1000 constituents, ETFs tracking major indices, and U.S. Treasury bills, bonds, and notes.
- DTC received an SEC No-Action Letter in December 2025 authorizing the tokenization service for three years on pre-approved blockchains.
- Tokenized assets retain full legal protections — the same entitlements, investor protections, and ownership rights as traditional securities.
- This bridges TradFi and DeFi at the infrastructure level, creating a single pool of liquidity across both ecosystems backed by DTCC’s operational resilience.
Why This Matters for Backpack and Crypto
This is not a proof-of-concept or a whitepaper exercise. DTCC is putting tokenized securities into production, and Backpack is at the table helping shape how it works.
The DTCC Industry Working Group includes firms from across the full spectrum of financial services: custodians (State Street, BNP Paribas, HSBC), major brokers (Charles Schwab, Robinhood, Raymond James), investment banks (Goldman Sachs, J.P. Morgan, Morgan Stanley, UBS), crypto-native platforms (Backpack, Kraken, Circle, Ondo Finance, Anchorage Digital, BitGo, Fireblocks), and trading venues (Nasdaq, NYSE Group, Tradeweb, Tel-Aviv Stock Exchange).
Backpack’s inclusion signals that the exchange is recognized as a serious participant in the institutional infrastructure buildout — not just a retail crypto platform, but a firm with the technical and operational credibility to contribute to the most consequential securities tokenization initiative in history.
What Exactly Gets Tokenized?
The SEC’s No-Action Letter, issued in December 2025, authorized DTC to tokenize a defined set of highly liquid assets. This includes the constituents of the Russell 1000 the 1,000 largest publicly traded U.S. companies by market cap along with ETFs tracking major U.S. equity indices and U.S. Treasury bills, bonds, and notes.
These are not speculative tokens. They are digital representations of real securities, custodied by DTC, carrying identical legal rights and investor protections to their traditional counterparts. The tokenized versions will be able to move between registered wallets on approved blockchains, opening the door to 24/7 trading, faster settlement, and programmable asset functionality.
The Timeline: From Testing to Launch
DTCC has laid out a clear production timeline. Initial, limited production trades of tokenized securities will begin in July 2026. The full tokenization service is set to launch in October 2026. Between now and then, the Industry Working Group including Backpack will continue to align best practices, prove operational and technical workflows, and test the interoperability of DTC tokenized assets across multiple chains.
How DTC’s Tokenization Service Works
DTC’s tokenization service is built on DTCC’s ComposerX platform suite. The architecture preserves the existing custody model: securities remain registered in DTC’s name, and the tokenized versions represent entitlements to those securities. This approach avoids the legal ambiguity that has slowed other tokenization efforts.
Participating firms, DTC Participants and their clients can choose to have their security entitlements recorded on a distributed ledger rather than exclusively through DTC’s centralized system. The resulting “tokenized entitlements” move directly between registered wallets on approved blockchains without DTC intermediating each transfer.
The benefits are structural. Tokenized real-world assets (RWAs) gain collateral mobility, programmability via smart contracts, and potential access to 24/7 markets. Settlement could eventually move toward T+0 — instant settlement — compared to the current T+1 standard, reducing counterparty risk and freeing up capital across the system.
Traditional Securities vs. DTC Tokenized Securities
DTCC has previously described tokenization's potential benefits as including collateral mobility, new trading modalities, 24/7 access, and programmable assets.
What Does Backpack’s Inclusion Mean?
Backpack is one of a number of crypto-native platforms included in the Working Group. The full list of participating firms spans major Wall Street institutions and digital-native firms, including Bank of America, BlackRock, Goldman Sachs, Charles Schwab, and others.
For Backpack users, the practical implications unfold over time. As tokenized securities become available on approved blockchains, exchanges and platforms involved in the Working Group will be best positioned to integrate these assets offering users a bridge between crypto markets and traditional securities within a regulated framework.
What Is the SEC’s Role in This?
The SEC played a critical enabling role. In December 2025, DTC received a No-Action Letter from the SEC’s Division of Trading and Markets. This letter provides DTC a three-year window to operate the tokenization service without facing enforcement action, as long as it operates within defined parameters.
The authorization covers specific safeguards: DTC must file quarterly notices, maintain strict access controls for participating blockchain networks, and demonstrate that its operational systems meet high resiliency standards. The SEC has indicated this pilot approach allows genuine experimentation inside one of the world’s most important settlement networks while preserving investor protections.
Is Tokenization the Future of Securities Markets?
DTCC’s CEO Frank La Salla stated the firm’s vision clearly: tokenization will significantly change how markets work and operate, bringing new levels of liquidity, transparency, and efficiency to investors. With $114 trillion assets in custody and $4.7 quadrillions in annual transaction volume, DTCC’s entry into tokenization is the strongest institutional signal yet that on-chain securities are not a fringe experiment; they are becoming core financial infrastructure.
The Industry Working Group’s breadth from Goldman Sachs to Backpack, from Nasdaq to Ondo Finance demonstrates that both TradFi and DeFi see tokenization as the convergence point. The firms collaborating on this initiative represent custodians, asset managers, brokers, trading venues, application providers, and crypto platforms. The full ecosystem is at the table.
The Bottom Line
Backpack’s inclusion in DTCC’s 50+ firm Industry Working Group places the exchange at the center of the most significant securities tokenization initiative ever undertaken. As tokenized versions of U.S. equities, index fund ETFs, and Treasury securities move toward production in July 2026 and a full launch in October 2026, Backpack is helping build the bridge between traditional finance and the on-chain future. For anyone watching the intersection of crypto and Wall Street, this is the story.
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