Industry Expert Highlights DTCC's Blockchain Upgrade for Security Entitlements

Source: DefiPlanet Original Title: Industry Expert Highlights DTCC’s Blockchain Upgrade for Security Entitlements Original Link: https://defi-planet.com/2025/12/industry-expert-highlights-dtccs-blockchain-upgrade-for-security-entitlements/

Quick Breakdown

• DTCC tokenizes security entitlements, not shares, improving U.S. market infrastructure.
• The direct ownership model enables self-custody, peer-to-peer transfers, and on-chain composability.
• Upgrade enhances settlement speed, collateral mobility, and institutional efficiency while preserving legal frameworks.

Industry expert Chuk, author of Stablecoin Blueprint, has highlighted the significance of a recent upgrade in U.S. capital markets, noting its potential to accelerate blockchain adoption in traditional finance. The Depository Trust & Clearing Corporation (DTCC) has introduced a blockchain-based tokenization system for security entitlements, following approval via a rare SEC no-action letter. The initiative modernizes the infrastructure supporting the U.S. securities system, which oversees $99 trillion in assets and processes trillions in annual trading volume. Under the upgrade, digital tokens represent entitlements to securities rather than the securities themselves, preserving the current intermediary framework while enabling faster, more efficient settlement.

DTCC didn’t put stocks onchain

Not the way you’d think

They tokenized entitlements, not shares

→ you won’t be on the shareholder register

Major for today’s plumbing, but not the future being pioneered via direct ownership platforms

Full breakdown below

Modernizing the existing system

Currently, most U.S. investors do not hold shares directly. Ownership is routed through a chain of intermediaries, with DTCC immobilizing bulk shares registered in the name of Cede & Co., a nominee. Investors’ brokers and clearing participants manage entitlements on behalf of clients. The new tokenization system provides a “digital twin” of these entitlements on an approved blockchain, enabling 24/7 movement, improved reconciliation, and the potential for faster collateral mobility. The DTCC model modernizes infrastructure without altering ownership structures or issuer records. Tokens remain permissioned, reversible claims within the existing regulatory framework, maintaining netting efficiency and liquidity concentration, which are critical to the system’s stability.

Direct ownership emerges as an alternative

Alongside DTCC’s upgrade, a direct-ownership model is emerging that tokenizes shares on issuer registers. This approach enables investors to self-custody, make peer-to-peer transfers, and run programmable on-chain financial applications. Platforms are already piloting direct tokenized shares, offering 24/7 trading while maintaining regulatory compliance. While the DTCC model focuses on improving the current system for institutions, direct ownership caters to investors seeking autonomy, composability, and new DeFi possibilities. Analysts suggest that both models are likely to coexist, with the DTCC upgrade enhancing core market efficiency and direct ownership paving the way for broader blockchain-native innovation in traditional finance.