The Depository Trust & Clearing Corporation (DTCC) has selected the Canton Network for a regulated tokenization pilot spanning a subset of U.S. Treasuries, Russell 1000 equities and ETFs, following a U.S. Securities and Exchange Commission no-action letter that authorizes a three-year program under specified Exchange Act parameters. The initiative will launch minimum viable products in early 2026 and expand in the second half of 2026 as operational insights and client demand shape a phased rollout.
Canton Network chosen as on-chain rail for regulated securities
DTCC’s subsidiary, the Depository Trust Company (DTC), received a Division of Trading and Markets no-action letter that limits SEC enforcement under defined Exchange Act provisions for the tokenization service, creating a controlled regulatory perimeter for the pilot. Participation will require DTC members to use registered wallets on SEC-approved chains, establishing a tightly governed custody and access model for tokenized securities within a three-year, time-boxed pilot that will start with targeted MVPs and broaden as participants gain operational comfort.
ComposerX, DTCC’s integration suite, will serve as the bridge between legacy infrastructure and the Canton Network, allowing DTC to record and enforce ownership on-chain while maintaining alignment with existing CUSIP identifiers and investor-protection rules. The service is explicitly designed to preserve bankruptcy safeguards, dividend and voting entitlements, and fungibility with off-chain records so that tokenized positions remain fully interoperable with traditional books and records.
The Canton Network is a Layer-1 blockchain built for institutional finance, with configurable privacy and access controls that ensure transaction details are visible only to authorized parties. In functional terms, the Canton Network is a shared-ledger platform engineered to support atomic, cross-application transactions with selective data disclosure for regulated institutions, using a smart contract layer and Daml tooling from Digital Asset to represent and manage tokenized assets.
Governance arrangements are evolving alongside the technical rollout, with DTCC set to assume a co-chair role on the Canton Foundation together with Euroclear, giving it direct influence over network standards and operational policies. ComposerX enhancements scheduled through 2025 will focus on composability and agnostic support for SEC-compliant chains, ensuring that traditional post-trade rails can interact consistently with on-chain workflows.
From a market-structure perspective, DTCC expects tokenized positions on the Canton Network to improve collateral mobility, support continuous trading outside traditional T+2 settlement windows and reduce reconciliations and trade failures through a single, immutable ledger. Prior tests on the network have already demonstrated weekend on-chain repo transactions, signaling the feasibility of extended trading hours without the constraints of legacy batch-processing systems.
DTCC’s adoption of the Canton Network formalizes a cautious, compliance-first path to tokenizing custody assets and embeds privacy-aware blockchain primitives directly into core market infrastructure. The pilot positions tokenization not as a parallel experiment, but as an incremental upgrade to existing securities plumbing that can be scaled if operational, legal and client-adoption thresholds are met.
