Regulatory Turnaround: The SEC authorizes DTC to experiment with US stock tokenization in Eastern Time

The real news doesn’t come from Nasdaq, but from the SEC

On December 11, 2025, Eastern US time, the SEC issued a “No-Action Letter (NAL)” to DTCC, the giant of centralized custody in the United States. While markets are divided over the details of Nasdaq’s (Form 19b-4) regarding trading hours extension, this letter marks the first concrete step toward the tokenization of US stocks.

Many investors have interpreted the document as full approval for blockchain use in the US stock market. The reality is more nuanced, but equally significant for the future of finance.

Who really controls the stock market: DTCC and DTC

To understand the significance of this letter, one must know the main players.

DTC (Depository Trust Company) is a subsidiary of DTCC (Depository Trust & Clearing Corporation), the giant that manages custody, clearing, and settlement of stocks and bonds in the US. Currently, DTC administers securities worth over 100 trillion dollars, essentially functioning as the centralized ledger of the entire US stock market. Every purchase, sale, and transfer passes through DTC’s systems.

If Wall Street had a “central database,” it would be DTC.

What is this No-Action Letter really about?

The SEC has not granted legal approval in the strict sense but has communicated that it will not take legal action against DTC during the pilot period of tokenization, provided specific parameters are met.

This distinction is crucial: the NAL does not change securities rules nor legalize blockchain in general on the stock market. It rather represents a temporary procedural exemption from Section 19(b) of the Securities Exchange Act, which normally requires lengthy approvals (up to 240 days) for any regulatory change. To experiment with tokenization without paralyzing processes, DTC requested and obtained a waiver during the pilot period.

How will tokenization work according to DTC’s plan

According to the SEC document, here is the operational process:

Phase 1 - Token issuance: When a broker wants to tokenize its shares, it moves them from a traditional account to a centralized pool at DTC. DTC then generates tokens on the blockchain and transfers them to a registered and approved wallet.

Phase 2 - Circulation: These tokens can circulate directly between brokers without passing through DTC’s centralized system for each transaction, significantly increasing speed.

Phase 3 - Monitoring: All movements are recorded in real-time by an off-chain system called LedgerScan, which remains the official ledger. DTC maintains full control: it can transfer or destroy tokens under specific circumstances, and approved wallets are limited to authorized market participants.

Phase 4 - Detokenization: Each time, the broker can convert tokens back into traditional shares within the centralized system.

In practice, the system remains centralized and controlled but with a “tokenized overlay” to improve operational efficiency. The legal nature of the shares does not change; only the back-office technology evolves.

Two parallel paths toward the future

The tokenization of US stocks will not follow a single path:

Official route (DTCC/DTC): Mainly developed by institutional infrastructures, invisible to end investors. Shares remain shares, but clearing and reconciliation systems become faster. Target: institutions and wholesale traders.

Front-end route (broker and platforms): Robinhood, MSX, and other trading platforms could serve as interfaces for retail users, integrating fractional trading, extended hours, and new forms of digital assets. For them, tokenization is a natural extension of the investment experience, not a revolution.

Both scenarios depend on clearer regulatory frameworks in the coming months.

What does this letter mean for markets?

Legally, the NAL is an official but non-binding communication. US securities law does not prohibit blockchain per se but regulates compliance with custody, risk management, and responsibility systems.

What the SEC has essentially communicated is: “Tokenization can proceed if it maintains current legal and security boundaries.”

Symbolically, this letter marks a turning point. A systemically important institution like DTCC would not have requested a procedural exemption if it did not see long-term tokenization as future infrastructure. And the SEC would not have responded positively if it considered the technology incompatible with securities regulation.

The true meaning: from an era of uncertainty to an era of adaptation

The tokenization of US stocks will not revolutionize Wall Street in the next few months, but it marks the transition from theoretical debate to controlled experimentation.

The discussion has shifted from “is it legal?” to “how to implement it safely?” — a fundamental transition.

In the short term, benefits will mainly concern settlement times (T+1 or even T+0), reduced operational costs, and cross-market integration. In the medium term, new custody and circulation models may emerge. In the long term, this infrastructure could become the foundation for a more efficient and interconnected securities market.

For investors and market participants, the message is clear: US stock tokenization is no longer a distant possibility but a project already on regulators’ agenda. Monitoring developments is not optional; it is necessary.