Exterior of the New York Stock Exchange on September 18, 2024 in New York City.
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The Depository Trust and Clearing Corporation will complete a series of financial transactions using digital versions, or “tokenization,” of assets held by The Depository Trust Company, the company announced Wednesday.
The day-long event, first reported by the Wall Street Journal, will feature more than 25 companies from the traditional financial and digital asset industries. To start the day, JPMorgan Invesco QQQ Trust (QQQ) converted into tokenized assets. goldman sachs, black rockVanguard and new york stock exchange A DTCC spokesperson confirmed that other participating companies include:
“Today marks the beginning of a long journey to demonstrate that old and new can coexist and that technology brings many opportunities to participants around the world,” Nadeem Chakar, global head of DTCC Digital Assets, said in a video statement released Wednesday morning. “We hope to prove the value of tokenization and build the foundation leading to a scalable release in October.”
Tokenization typically refers to the process of issuing a digital representation on a blockchain network of a publicly traded security, real-world asset, or other form of value. The often-touted benefits of blockchain technology include lower costs, faster settlement times, increased transparency regarding ownership and performance, and programmable terms, as well as increased accessibility and global reach for retail investors.
DTCC is the central post-trade organization in the U.S. financial system that processes, settles, and secures most stock and debt transactions. The company’s subsidiaries processed $47 trillion worth of securities transactions last year.
The financial industry has been discussing tokenization for years, but it has never been widely adopted. Meanwhile, Ondo and Securitization Threatening legacy clearing infrastructure through high-profile partnerships with giants such as black rock.
“DTCC is bridging TradFi and DeFi, ensuring capital markets are built on the same infrastructure that has supported global financial markets for decades,” Brian Steele, president of clearing and securities services at DTCC, said in a statement. “Through DTCC Tokenization Services, we have the opportunity to realize greater efficiency, deeper liquidity, and new ways to move and use assets.”
Although still in its early stages, the DTCC trial is a concrete step towards adoption. Wednesday’s event aims to leverage existing financial infrastructure to demonstrate how tokenized assets work across collateral, repos, equity, margin, and asset transfers.
shares of microsoft, circle internet group, Invesco QQQ Trust, State Street SPDR S&P 500 ETF Trust (SPY) and iShares 0-3 Month Government Bond ETF (SGOV)and government bonds of various maturities are expected to be tokenized during the demonstration.
