Depository Trust and Clearing Corporation (DTCC) Launches a Blockchain-Based Platform for Tokenized Collateral Management

The Depository Trust and Clearing Corporation (DTCC), the world’s largest securities settlement system, is pushing deeper into crypto by introducing a blockchain-based platform for tokenized collateral management.

Depository Trust and Clearing Corporation (DTCC), the world’s largest securities settlement system, is venturing deeper into crypto with a new blockchain-based platform for tokenized collateral management.

Announced Wednesday, the platform aims to streamline and automate the process of handling collateral across financial markets, building on DTCC’s existing role in post-trade services.

The company’s efforts come as institutions are increasingly exploring the potential of tokenized assets to transform financial markets, focusing on use cases like operational efficiencies, speedier settlements and increased transparency compared to using traditional financial plumbing.

In a press release, DTCC highlighted the critical role of collateral in risk management, ensuring market stability amid market fluctuations. However, it pointed out that traditional systems are often plagued by inefficiencies due to fragmented infrastructure and lagging settlements.

The new platform, running within DTCC’s AppChain ecosystem which is built on top of LF Decentralized Trust’s Besu blockchain, will address these challenges by tokenizing collateral on blockchain rails. This integration enables real-time transfers and the automation of collateral functions through smart contracts, DTCC said.

"Collateral mobility is the ‘killer app’ for institutional use of blockchain," said Dan Doney, chief technology officer of DTCC Digital Assets. "By using smart contracts to automate the full range of collateral operations, we enable complex trade execution across markets in real-time at any time, even in volatile conditions."

The initiative also ties into the broader trend of asset tokenization, which has seen institutions like BlackRock, CME Group and Fidelity experimenting with the technology to tokenize bonds, funds and other traditional investments.

DTCC will be showcasing the platform’s capabilities at its "The Great Collateral Experiment" event on April 23, where industry participants will test how tokenized assets can be mobilized across markets. The company said it’s engaging with regulators and industry leaders to establish global standards for tokenized collateral.