A quadrillion-dollar plumbing system moves toward crypto
The Depository Trust & Clearing Corporation, the DTCC, settles and safeguards most stock and bond deals in the United States. Clearing and settling these trades through the DTCC is required by law. It settles $2 to $4 quadrillion a year. That is the number that matters, not "another trillion," but quadrillions.
The DTCC is the backbone of Wall Street. Congress set it up about 53 years ago to fix the "paperwork crisis." Stocks were booming, messengers ran up and down Wall Street by hand, and trading grew so heavy the paper piled up. Firms saw they were all doing the same redundant work, so they joined together and built the DTCC. Pushing into tokenization now fits that same mission.
The DTCC holds about $100 trillion in assets and 1.4 million CUSIPs in custody. It wants to let its members and their clients use tokenized assets as collateral and move that collateral at the speed of the network. One example: someone financing a security during Japanese trading hours, while the US is asleep, could still move and use a US security if it sits in their wallet. The plan over time is to rebuild the infrastructure and rails of the US capital markets.
The trial run with the big banks
This event was a trial run to show what is possible. The DTCC teamed up with BlackRock, JP Morgan, Goldman Sachs, and 25 other firms, 28 in total counting the big three, to make its first tokenized stock and treasury production trades. It was a tangible step toward adoption, though still an early phase. Wednesday's demonstration showed how tokenized assets can work across collateral, repo, equities, margin, and asset transfers, all by using the financial system that already exists.
JP Morgan ran a live tokenization of Invesco's NASDAQ 100 ETF, which trades under the ticker QQQ, one of the most liquid and most traded ETFs in the world.
What can a digital twin of QQQ do that the traditional asset cannot? An asset on a blockchain can move 24/7, 365 days a year, at the speed of the internet. Through smart contracts it also becomes programmable, so it can be set to move in an automated, systemic way.
Which chains they picked
The chains used were Hyperledger Besu, the DTCC's own private network, and Canton, a public network with the ticker CC, per Bloomberg senior analyst Eric Balchunas. The DTCC calls this a multi-chain strategy for resiliency, stability, and choice.
They chose their own private network plus Canton. Canton is new. It is a public blockchain, but it has only been alive since the end of last year, and it is heavily centralized in who holds the tokens, controlled by big Wall Street entities. It is close to Wall Street building a blockchain it can control. When they tokenized SPY, QQQ, Microsoft stock and the rest, they picked the chain they control.
To get real liquidity and a global community trading a tokenized QQQ, they will eventually need to reach the liquidity of Ethereum and Solana, possibly in a rollout later this year.
The altcoins in the mix
QQQ was JP Morgan's pick, but other coins are in play. Ondo launched the first tokenized stock representations on the DTCC service, including CircleOn and SPYOn as digital twins of DTC-held securities. Ondo Finance also partnered with Japan's SBI Group to tokenize Japanese assets and settle them using JPYSC, a Japanese Yen stablecoin.
Citadel, a major name in traditional finance, went with crypto.com and its CRO token. Citadel Securities put $400 million into crypto.com at a $20 billion valuation. Ken Griffin's market-making giant is taking a strategic stake in the Singapore-based exchange, which serves over 140 million users worldwide. CRO jumped 18% on the news. Watch what the big money does, not just what it says.
Chainlink is the other clear winner from the DTCC push. Link partnered with the DTCC about two and a half months ago, in May. As everything moves on-chain, it will rely on oracles like Link to feed in data.
Washington angle
President Trump is meeting with senators to discuss the Crypto Clarity Act. Tomorrow the US House Committee on Financial Services will hold a hearing to work through the same clarity question.
