DTCC and Digital Asset will tokenize a subset of U.S. Treasury securities on the Canton Network using DTCC’s ComposerX suite to mint digital twins of DTC‑custodied Treasuries. The project proceeds under an SEC no‑action letter that permits a three‑year pilot and contemplates a minimum viable product (MVP) running in a controlled production environment.
DTCC’s initiative targets persistent frictions in traditional Treasury settlement that tokenization can address. Capital is often locked during the T+1 settlement cycle, limiting institutions’ ability to redeploy liquidity; atomic settlement on blockchain can shrink that window and reduce counterparty exposure.
Tokenized Treasuries also aim to cut operational costs by reducing manual reconciliation across intermediaries and to enable near‑continuous trading and fractional ownership, potentially freeing significant capital and improving collateral efficiency. Market estimates cited in the project’s analysis suggest tokenized U.S. Treasuries could grow rapidly, with projections reaching $50 billion by the end of 2025.
The Canton Network provides a privacy‑focused, permissioned architecture tailored for institutional finance, with a ‘network of networks’ model that lets sovereign sub‑networks interoperate while preserving each participant’s control over data disclosure. A Global Synchronizer enforces atomic cross‑network transactions so multi‑party exchanges either complete fully or roll back, protecting against settlement mismatch.
Technology and lifecycle management on Canton
DTCC will deploy ComposerX — a DLT‑agnostic platform — to manage issuance, distribution, servicing (coupon payments and redemptions), reporting and digital collateral workflows. ComposerX’s LedgerScan component merges on‑chain and off‑chain data to produce market‑wide accounting records of ownership and encumbrance, improving auditability and regulatory reporting.
The SEC granted DTCC a no‑action letter authorizing a three‑year pilot covering a defined set of liquid asset classes, including U.S. Treasuries, ETFs tracking major U.S. indices and Russell 1000 constituents, with an MVP designed to operate in a controlled production environment.
DTCC will co‑chair the Canton Foundation alongside Euroclear, a governance role that positions it to influence standards and the network roadmap. Key risks flagged for the program include cross‑network interoperability challenges, heightened cybersecurity demands, potential centralization introduced by mechanisms such as a root wallet able to reverse transactions, technical scalability to support Treasury market volumes, and a dynamic regulatory landscape beyond the no‑action window that could affect long‑term scalability.
The DTCC–Digital Asset deployment on Canton seeks to modernize settlement and collateral use for high‑quality liquid assets while preserving institutional privacy and governance.
