Tom Pikett: DTCC Is Bringing $30 Trillion Onchain (Insider Take)

DTCC’s live tokenization service covers 34 securities, including equities and U.S. Treasuries, representing the potential to bring about $30 trillion of value onchain. Tom Pikett said that estimate is based on no-action data DTCC received last year; the securities’ value has not already been tokenized. DTCC is tokenizing the entitlement rather than treating tokens as the product in themselves, with the aim of preserving its central securities depository capabilities in a compliance-aware framework.

Pikett said DTCC developed the launch methodically with regulators. The service embeds compliance in tokens and includes a registered DTC wallet service that supports transfers around the clock. For DTCC, the practical case for tokenization depends on applications that solve business problems, not simply on moving assets onto a blockchain. Collateral mobility is a central example: institutions could use assets across markets and time zones instead of sourcing cash or other assets while a market is closed.

A July production event demonstrated collateral operations onchain using DTC tokens. DTCC is building a collateral app chain and shared infrastructure intended to support collateral onchain at scale, and Pikett said the app chain is expected to go live in the first half of next year. The product is meant to work globally, not only with U.S. or DTC assets. If assets can move across counterparties and connected systems, Pikett said, collateral could circulate more quickly while reducing costs, balance-sheet use, and operational friction; a paper on possible cost savings and revenue opportunities described the opportunity as involving billions.

Tokenized money market funds could be delivered directly as collateral rather than redeemed to meet a margin call, while just-in-time delivery could free buffer assets for more productive use. Pikett framed this as a way to improve how firms deploy existing assets, not as a guarantee that every asset or workflow should be tokenized. He predicted that tokenization would make sense for many cases over the next three to five years and could enable balance-sheet benefits and global asset use, while cautioning that it would not make sense in every case.

DTCC is connected to Canton Network and Hyperledger Besu and is working toward broader interoperability. It works with Chainlink on pricing data and announced use of Chainlink’s CRE to bring pricing data and related smart-contract workflows onchain. In a Fulcrum demonstration, collateral blocked on DTCC’s app chain triggered a release on another chain, but Pikett said this was only a sandbox demonstration. DTCC has also worked with Clearstream and Euroclear on possible shared standards, reflecting the need for systems to connect across firms and networks.

Settlement design will depend on the activity: DTCC nets down 98% of the trades it processes, so gross atomic settlement will not suit every use case. Some activity may continue to be netted, while intraday repo could be suited to atomic gross settlement; tokenization could give firms flexibility to choose between netting and gross settlement. DTCC’s priorities are to expand eligible assets and develop use cases with a clear business case, with 150 firms in working groups helping guide its plans.

Pikett identified firms’ unfamiliarity with wallets, settlement instructions, blockchain addresses, and business settlement as obstacles to adoption. Firms also need systems that present traditional and onchain assets together so they can decide how to deploy them. A holistic view could help firms choose whether to generate yield, post collateral, or mobilize assets to counterparties on connected chains, potentially around the clock and on weekends.