SEC “TWO-YEAR-ON-THE-CHAIN” PROPHECY: TOKENIZATION OF THE DTCC LIQUIDATION SYSTEM

Original by: @ BlazingKevin_, the Researcher at Movemaker

THE CHAIRMAN OF THE SEC, PAUL ATKINS, POINTED OUT THAT THE ENTIRE FINANCIAL MARKET IN THE UNITED STATES, INCLUDING EQUITIES, FIXED EARNINGS, PUBLIC DEBT AND REAL ESTATE, COULD MOVE COMPLETELY OVER THE NEXT TWO YEARS TO THE BLOCK CHAIN TECHNICAL ARCHITECTURE THAT UNDERPINS ENCRYPTED CURRENCIES. THIS CAN BE DESCRIBED AS THE MOST SIGNIFICANT STRUCTURAL CHANGE IN THE UNITED STATES FINANCIAL SYSTEM SINCE THE ADVENT OF ELECTRONIC COMMERCE IN THE 1970S。

1. Full-fledged cross-sectoral collaborative frameworks and practical contributions

The “Project Crypto” initiative of Atkins is not a unilateral initiative of the SEC and is based on systematic cooperation across legislation, regulation and the private sector. Achieving the full chain of United States financial markets worth more than $50 trillion (including equities, bonds, national debt, private credit, real estate, etc.) requires a clear role and contribution from multiple institutions。

1.1 Government departments involved in full assetization

It should be added that the “Project Cripto” and “Innovative Exemptions” mechanisms recognize the incompatibility of block chain technologies with existing financial regulations, provide a controlled test environment that allows traditional financial institutions (TradFi) to explore and implement monetized infrastructure without violating core investor protection principles。

GENIUS Act solved the problem of Cash Leg, which is necessary for institutions to carry out transactions and mortgages in the chain, by creating a stable currency that is compliant and is endorsed in full by the full reserve, with clear transfer of supervisory authority to the banking regulator。

By dividing the jurisdictions of the SEC and the CTC, CLARITY Act explicitly targeted the encrypted original platform and created a definition of “maturity”, enabling the institution to know clearly which regulatory body the digital assets it holds (e.g., bitcoin) operate in, while providing a way for the encrypted original platform to be registered as a federal regulatory intermediary (“broker/tradler”)。

FOUNDED IN 1973, OCC PROVIDES CLEARING AND SETTLEMENT SERVICES FOR RIGHTS, FUTURES AND SECURITIES LENDING TRANSACTIONS TO PROMOTE MARKET STABILITY AND INTEGRITY。- CFTC. - YESThe main managers of futures markets and futures dealers。

This cross-sectoral synergy is a prerequisite for full chaining of United States financial markets, providing a solid basis for the subsequent large-scale deployment of giants such as Blackrock, Morgan Chase and the integration of core infrastructure such as DTCC。

2.2 Collaboration of traditional financial giants

In the United States ' traditional financial giants ' blueprint for collaboration, the deeper layout of institutions reflects more specific strategic focus and technical detail. Belet was the first to be issued on the public chain (the Taifung) as the United States Treasury Debt Fund, which laid down its position as a cornerstone of the introduction of traditional financial gains into the public chain ecosystem as asset managers。

After changing the name of its block chain operations to Kinexys, Morgan Chase allowed banks to complete the atom exchange of tokenized collateral and cash within hours rather than days, significantly optimizing liquidity management; at the same time, its initiative to pilot JPMD on the Base chain was seen as a strategic step forward to the wider public block chain ecosystem, aiming at greater interoperability。

FINALLY, AS THE WORLD'S MOST IMPORTANT TRADING INFRASTRUCTURE PROVIDER, THE TRUST AND CLEARINGHOUSE (DTCC), WHICH HAS COMPLETED A CONCRETE BREAKTHROUGH WITH ITS SUBSIDIARY, THE DEPOSITORY TRUST (DTC), HAS OBTAINED A SEC “NO OBJECTION LETTER” THAT ENABLES IT TO LINK THE TRADITIONAL CUSIP SYSTEM TO THE NEW TOKEN INFRASTRUCTURE, THUS FORMALLY OPENING A PILOT PROCESS FOR THE MONETIZATION OF MAINSTREAM ASSETS, INCLUDING RUSSELL 1,000 COMPONENT SHARES, IN A CONTROLLED ENVIRONMENT。

2. Financial environment and impact analysis after full monetization

The central objective of asset monetization is to break the “solar effects” and “time limits” of traditional finance and to create a global, programmable, 24-hour financial system。

2.1Significant improvements in the financial environment: leaps in efficiency and performance

The monetization of the system will provide an incomparable efficiency and performance advantage for the traditional financial system:

2.1.1 EXPEDITION AT SETTLEMENT SPEED (T+1/T+2 TO T+0/S):

Raise:A BLOCK CHAIN CAN ACHIEVE NEAR REAL-TIME (T+0) OR EVEN SECOND-GRADE SETTLEMENT AND DELIVERY, IN SHARP CONTRAST TO THE T+1 OR T+2 SETTLEMENT CYCLE NORMALLY REQUIRED BY TRADITIONAL FINANCIAL MARKETS. THE DIGITAL BOND ISSUED BY UBS AT SDX DEMONSTRATED T+0 SOLVENCY, AND THE DIGITAL BOND ISSUED BY THE EUROPEAN INVESTMENT BANK REDUCED THE SETTLEMENT TIME FROM FIVE DAYS TO ONE DAY。

The pain to be solved:The credit and operational risks of counterparties resulting from late settlement have been significantly reduced. For time-sensitive transactions such as buy-backs and derivative bonds, an increase in settlement speed is crucial。

2.1.2 Capital efficiency revolution and liquidity releases:

Raise:“atom delivery” is achieved, i.e. assets and payments occur simultaneously in individual, indivisible transactions. At the same time, monetization allows the release of “sleep capital” currently locked in settlement waiting periods or inefficient processes. For example, programmable collateral management can release over $100 billion of trapped capital annually。

The pain to be solved:The principal risk in the traditional “delivery before payment” operation was eliminated. The need for a high margin buffer for liquidation has been reduced. At the same time, the monetized money market funds (TMMFs) can be used as collateral for direct transfers, preserving gains and avoiding liquidity frictions and gains resulting from the need to redeem cash and reinvest in traditional systems。

2.1.3 Increased transparency and auditability:

Raise:Distributive books provide a single, unmistakable record of authoritative ownership, and all transactions are public and verifiable. Smart contracts allow for automatic compliance checks and corporate behaviour (e.g., interest payments)。

The pain to be solved:The inefficiency of data isolation, multiple bookkeeping and manual reconciliation in traditional finance has been completely addressed. It provides an unprecedented “God's Perspective” that allows real-time, penetrating regulation and effective monitoring of systemic risks。

2.1.4 24/7/365 Global Market Access:

Raise:The market is no longer restricted to the working hours, time zones or holidays of traditional banks. The monetization has made cross-border transactions smoother and assets can be transposed globally。

The pain to be solved:Overcoming time lags and geographical constraints in traditional cross-border payments and liquidity management has been particularly beneficial to the cash management of TNCs。

2.2 Participants most affected

The changes brought about by monetization are subversive and have had the greatest impact on the following categories of market participants:

Key challenges and risks:

• Balance between liquidity and netting:DTCC CURRENTLY ACHIEVES SIGNIFICANT CAPITAL EFFICIENCY BY NETTING MILLIONS OF TRANSACTIONS AND REDUCING THE VOLUME OF CASH AND SECURITIES ACTUALLY REQUIRED BY 98 PER CENT. ATOMIZED SETTLEMENT (T+0) IS ESSENTIALLYREAL-TIME FULL SETTLEMENT (RTGS)This may result in loss of netting efficiency and require a combination of market solutions between speed and capital efficiency, such as buy-backs in the day。
• Privacy paradox:Institutional finance depends on the privacy of transactions, while the public chain (e.g. the Ether House) is transparent. Large institutions are not able to carry out large transactions in the open chain without being “discovered”. The solution is to use privacy protection techniques, such as zero-knowledge certification, or to operate on a licensing chain (e.g., Kinexys of Morgan Chase)。
• Systemic risk amplification:24/7 MARKETS ELIMINATE THE “COOLING PERIOD” OF TRADITIONAL MARKETS. ALGORITHMIC TRANSACTIONS AND AUTOMATED BOND RECOVERY (THROUGH SMART CONTRACTS) CAN TRIGGER LARGE-SCALE SERIAL LIQUIDATIONS UNDER MARKET PRESSURE, THEREBY MAGNIFYING SYSTEMIC RISKS, SIMILAR TO THE LIQUIDITY PRESSURES IN THE UK LDI CRISIS OF 2022。

2.3 PRESENTATION OF THE CORE VALUES OF THE FUND

The monetization of money market funds (MMFs) is the most representative case of growth in RWA. TMMFs are particularly attractive as collateral:

• Retention of proceedsUnlike interest-bearing cash, TMFs can generate income on a sustainable basis until they are actually used, reducing the opportunity cost of “collateral drag”。
• High mobility and groupability:TMMFs combine the traditional MMFs' regulatory familiarity and safety with the immediate settlement and programmability that DLT brings. For example, the BIDL Fund in Beled has managed to fix the pain of traditional MMF fortuitive T+1 through the USDC Instant Redemption Channel in Circle and has achieved 24/7 instant liquidity。

3. THE ROLE OF DTCC/DTC IN THE MONETIZATION PROCESS

DTCC AND DTC ARE ESSENTIAL CORE SYSTEMIC INSTITUTIONS IN THE FINANCIAL INFRASTRUCTURE OF THE UNITED STATES. THE SIZE OF THE ASSETS HELD BY THE DTC COVERS THE VAST MAJORITY OF THE UNITED STATES CAPITAL MARKET FOR EQUITY REGISTRATION, TRANSFER AND HOSTING. DTCC AND DTC ARE CONSIDERED “GENERAL WAREHOUSE” AND “GENERAL LEDGER” IN THE UNITED STATES STOCK MARKET. THE INVOLVEMENT OF DTCC IS KEY TO ENSURING COMPLIANCE, SECURITY AND LEGAL EFFECTIVENESS OF THE MONETIZATION PROCESS。

3.1 CORE ROLES AND RESPONSIBILITIES OF THE DTC

• Identity and size:DTC IS RESPONSIBLE FOR CENTRAL SECURITIES HOSTING, LIQUIDATION AND ASSET SERVICES. AS OF 2025, DTC HOSTING ASSETS HAD A SIZE OF $10.3 TRILLION, COVERING 1.44 MILLION SECURITIES ISSUED, AND DOMINATED THE REGISTRATION, TRANSFER AND SECURITIZATION OF THE VAST MAJORITY OF UNITED STATES CAPITAL MARKETS。
• DTCC INTERVENTIONS REPRESENT OFFICIAL RECOGNITION OF DIGITAL ASSETS IN THE TRADITIONAL FINANCIAL INFRASTRUCTURE. ITS CORE RESPONSIBILITY IS TO SERVE AS A BRIDGE OF TRUST BETWEEN THE TRADITIONAL CUSIP SYSTEM AND THE EMERGING MONETIZATION INFRASTRUCTURE. DTCC IS COMMITTED TO MAINTAINING THE SAME HIGH LEVEL OF SECURITY, ROBUSTNESS, LEGAL RIGHTS AND INVESTOR PROTECTION AS TRADITIONAL FORMS OF MONETIZATION。
• Liquidity integration: DTCC ' s strategic objective is to achieve a single liquid pool between TradFi (traditional finance) and DeFi (decentralized finance) ecosystems through its ComposerX platform suite。

3.2 DTC MONETIZATION PROCESS AND SEC NO OBJECTION

IN DECEMBER 2025, DTC, A SUBSIDIARY OF DTCC, WON THE LANDMARK US SECNo objectionThis is the legal basis for its large-scale monetization operations。

3.3 IMPACT OF DTC MONETIZATION

DTC NAL APPROVAL IS CONSIDERED A MILESTONE IN THE MONETIZATION PROCESS, THE IMPACT OF WHICH IS MAINLY AS FOLLOWS:

• The certainty of official tokens:DTC’S MONETIZATION MEANS THAT THE OFFICIAL ENDORSEMENT OF THE UNITED STATES IS IMMINENT. A FUTURE PROJECT THAT WILL MONETIZE UNITED STATES EQUITY WILL LIKELY HAVE DIRECT ACCESS TO DTC’S OFFICIAL ASSET TOKEN RATHER THAN BUILD ITS OWN UPLINK INFRASTRUCTURE。
• Market structural integration:THE MONETIZATION WILL DRIVE THE MODEL OF THE US STOCK MARKET TOWARDS CEX+ DTC TRUST. EXCHANGES SUCH AS NASDAQ MAY END UP PLAYING CEX, WHILE DTC MANAGES TOKEN CONTRACTS AND ALLOWS FOR CURRENCY AND COMPLETE LIQUIDITY。
• Enhancing collateral mobility:DTC ' S MONETIZATION SERVICES WILL SUPPORT ENHANCED COLLATERAL MOBILITY TO ACHIEVE 24/7 ACCESS AND ASSET PROGRAMMABILITY. DTCC HAS EXPLORED THE USE OF DLT TECHNOLOGY TO OPTIMIZE COLLATERAL MANAGEMENT FOR ALMOST A DECADE。
• Elimination of market fragmentation:Stock tokens are no longer the digital type that separates from traditional assets, but are fully integrated into the general books of traditional capital markets。

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Movemaker is the first official community organization to be launched jointly by Ankaa and BlockBooster, under the authority of the Aptos Foundation, and focuses on promoting the construction and development of the Aptos Chinese-speaking community. As the official representative of Aptos in the Chinese-speaking Community, Movemaker aims to build a diverse, open and prosperous Aptos ecosystem by connecting developers, users, capital and numerous ecological partners。

Declaration of exemption:

This post/blog is for reference only and represents the author's personal point of view and does not represent the Movemaker's position. It is not intended to provide: (i) investment proposals or investment recommendations; (ii) offers or solicitations for the purchase, sale or holding of digital assets; or (ii) financial, accounting, legal or tax recommendations. Holding digital assets, including stable currencies and NFTs, is extremely risky, with high price volatility and may even become worthless. Carefully consider whether a transaction or holding of a digital asset is appropriate for you, depending on your financial situation. Ask your legal, tax or investment adviser if you have any specific problems. The information provided in this paper (including market data and statistical information, if any) is of general interest only. Due diligence has been exercised in the preparation of these data and charts, but no responsibility exists for any factual errors or omissions expressed therein。