The U.S. Securities and Exchange Commission (SEC) has approved a three-year pilot program for the Depository Trust & Clearing Corporation (DTCC) to record U.S. securities on selected blockchains using “registered” wallets. This initiative aims to allow the market clearinghouse to create tokenized entitlements representing a new form of digital ownership, subject to minimal regulatory oversight. The program is part of broader efforts to integrate blockchain technology into the traditional financial system to enhance transparency, speed, and security in investment processes. As a central clearinghouse, DTCC facilitates the verification and clearing of securities transactions, and utilizing blockchain for record-keeping could make these processes more efficient and automated, boosting market confidence and performance. Under the pilot, specific wallets on selected blockchain networks will be registered to securely maintain securities records in compliance with legal and regulatory requirements. This platform will enable market participants to hold their investments in the form of digital tokens, which offer a more advanced and reliable alternative to traditional paper and electronic records. This marks the first significant approval by U.S. financial regulators for recording securities on blockchain, signaling a growing trend toward digitalization in financial markets. Nonetheless, challenges related to security, privacy, and regulatory complexities remain and will require ongoing oversight. The pilot’s outcomes are expected to inform future strategies for broader adoption of blockchain technology in financial markets, aiming to make investment processes more transparent and efficient.
Source: decrypt
