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DTCC tokenisation service goes live in October on SEC relief that expires three years after launch

Writer: Shawn Jhanji
Shawn Jhanji
Sep 23
5 min read

Updated: 6 days ago

The main US system for recording and settling securities trades is about to hold tokenised shares in live operation, on permission that lasts three years. For UK firms, that is a second end date to plan around, next to the UK's own sandbox.


The Depository Trust & Clearing Corporation (DTCC) will move its tokenisation service into full production in October 2026, under a letter from staff at the US Securities and Exchange Commission (SEC) that expires three years after launch.


DTCC's tokenisation service moves from testing to full production in October 2026.

DTCC's subsidiary, the Depository Trust Company (DTC), holds $114tn of assets for its members, according to DTCC's announcement of 4 May 2026. The service lets the banks and brokers that use DTC hold digital tokens representing assets DTC already holds for them. It covers shares in the Russell 1000, an index of roughly the 1,000 largest US listed companies, major exchange-traded funds and US Treasury bills, notes and bonds. On 15 July DTCC said it had processed real trades using tokenised assets in its live system, with more than 30 firms taking part, including BlackRock, Goldman Sachs, J.P. Morgan, Vanguard and the London-headquartered broker Marex. The trades included share transfers, government bond trades, securities lending and pledging tokens as collateral. Frank La Salla, DTCC's chief executive, said the test showed DTCC "can apply the same institutional rigor to tokenization as we do for traditional assets."


The permission behind the DTCC tokenisation service


The service does not rest on a new rule. It rests on a no-action letter dated 11 December 2025, in which SEC staff said they would not recommend enforcement action against DTC for running the service as described. According to a January 2026 summary by the law firm Morgan Lewis, the relief lasts for "a three-year period from the date DTC launches operation" of the service. On 21 September The Industry Spread pointed out that the three years start at launch, which DTC must notify to the SEC in writing, rather than when the letter was signed. An October 2026 launch would take the relief to October 2029. The Industry Spread also noted that SEC staff can change or withdraw it at any time, and that it does not renew automatically.


One limit in the letter sits awkwardly with the July test. Morgan Lewis records that the tokens "do not receive any collateral or settlement value for DTC risk management purposes." Firms can pledge tokens to each other, as they did in July, but DTC's own system will not count them as security while the relief applies.


The UK has taken a different legal route to the same question. The Bank of England and the FCA have run the Digital Securities Sandbox since 30 September 2024 under UK regulations. According to the law firm A&O Shearman, it is due to run until December 2028 and may be extended. The Bank of England's guidance, updated on 30 June 2026, says HM Treasury can make the sandbox's adjusted rules permanent by statutory instrument after reporting to Parliament. HM Treasury said on 16 July that HSBC Orion had been approved for live activity in the sandbox on 13 July, with the first Digital Gilt Instrument transaction due by the first quarter of 2027. Neither side has yet turned its temporary permission into permanent rules. Whether that happens before October 2029 in the US, or December 2028 in the UK, is the question firms building on either system will be watching.


Key takeaways


  • DTCC's tokenisation service covers Russell 1000 shares, major exchange-traded funds and US Treasuries, and moves into full production in October 2026.

  • It relies on an SEC staff no-action letter that lasts three years from launch, can be withdrawn at any time and does not renew automatically.

  • Tokens will carry no collateral value inside DTC's own risk system, even though the July test included collateral pledges between firms.

  • The UK's Digital Securities Sandbox runs until December 2028, and HM Treasury has a power to make its rules permanent.


Sources


How DTCC's tokenisation service got here: timeline


  • August 2026: Reporting on 13 August described the July test as a four hour live session that also covered responses to margin calls, with Invesco and Citadel Securities among the participants. The same coverage tied the IMF's warning directly to DTCC's October timeline, arguing that launch dates were moving faster than international standard setters were agreeing safeguards. Blockhead report

  • July 2026: The IMF published a note on the rise of tokenisation, warning that markets which settle faster and trade around the clock could also transmit shocks faster, with fewer of the circuit breakers and settlement delays that slow contagion in a crisis.

  • May 2026: On 18 May, the FCA and the Bank of England published a joint tokenisation roadmap that names interoperability with international counterparts as a design priority for UK digital securities infrastructure.

  • May 2026: On 4 May, DTCC said limited production trades of tokenised securities would begin in July, ahead of the full launch in October. More than 50 firms were shaping the service, including Goldman Sachs, BlackRock, JPMorgan, Morgan Stanley, Bank of America, Circle and Ondo Finance. DTCC settles more than $3.7 quadrillion in transactions a year. Around the same time, SEC Chair Paul Atkins said he intended to develop formal rulemaking for onchain trading systems and blockchain settlement. CoinDesk report


Frequently asked questions


When does the DTCC tokenisation service go live?

DTCC will move its tokenisation service into full production in October 2026. On 15 July 2026 it said it had already processed real trades using tokenised assets in its live system, with more than 30 firms taking part.

Which assets does the DTCC tokenisation service cover?

The service covers shares in the Russell 1000, major exchange-traded funds and US Treasury bills, notes and bonds. It lets banks and brokers that use DTC hold digital tokens representing assets DTC already holds for them.

How long does the SEC no-action relief for DTC tokenisation last?

The SEC staff no-action letter dated 11 December 2025 gives relief for three years from the date DTC launches the service, so an October 2026 launch would take it to October 2029. SEC staff can change or withdraw it at any time, and it does not renew automatically.

Can DTC tokens be used as collateral?

Firms can pledge tokens to each other, as they did in the July test. However, under the no-action letter the tokens receive no collateral or settlement value for DTC's own risk management purposes while the relief applies.

How long will the UK Digital Securities Sandbox run?

The Digital Securities Sandbox, run by the Bank of England and the FCA since 30 September 2024, is due to run until December 2028 and may be extended. HM Treasury can make its adjusted rules permanent by statutory instrument after reporting to Parliament.

What risk has the IMF raised about tokenisation?

In a July 2026 note, the IMF warned that tokenised markets which settle faster and trade around the clock could transmit shocks faster, with fewer of the circuit breakers and settlement delays that traditionally slow contagion in a crisis.


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