The Company Behind Wall Street's Plumbing Is Looking To Tokenize MSFT Stock: Report

• DTCC is testing the tokenization of stocks and Treasuries, marking a major step toward blockchain-based settlement on Wall Street.
• Nearly 40 firms, including JPMorgan, Goldman Sachs, BlackRock and Vanguard, are participating in the pilot program.
• The initial batch of tokenized assets includes Microsoft, Circle, QQQ, SPY, SGOV, and U.S. Treasuries.

The Depository Trust & Clearing Corp. (DTCC), the trade processor behind much of Wall Street's back-end infrastructure, reportedly plans to convert stocks such as Microsoft (MSFT) and other securities into digital tokens, marking the clearinghouse's latest step toward a fully digital Wall Street.

MSFT’s price was up over 1% in the morning trade. On Stocktwits, retail sentiment around MSFT remained in the ‘bearish’ zone, while chatter around it stayed at ‘normal’ levels over the past day.

On Wednesday, the Wall Street Journal reported that almost 40 financial firms and tech providers, from JPMorgan Chase (JPM) and Goldman Sachs (GS) to BlackRock (BLK), Vanguard, and the New York Stock Exchange (NYSE), will take part in a trial run to tokenize securities. The tokens will be stored at the clearinghouse on the blockchain and made available for trade, DTCC reportedly told the Journal.

"The tokenization of assets and digital blockchain usage are a megatrend," DTCC President and CEO Frank La Salla told the Journal, adding that the company's focus is on "safety of the system, resiliency of the system, and working on ways in which we can free up trapped liquidity by using this new technology."

Pilot Includes Circle and Treasury Assets

The assets set to be tokenized also include shares of Circle Internet Group (CRCL), Invesco QQQ Trust (QQQ), State Street SPDR S&P 500 ETF Trust (SPY), and iShares 0-3 Month Treasury Bond ETF (SGOV), as well as Treasuries of different tenors.

CRCL’s price was up over 3% in morning trade. On Stocktwits, retail sentiment around CRCL remained in the ‘bullish’ zone, while chatter stayed at ‘high’ levels over the past day.

Formal Launch Planned For October

DTCC plans to formally launch its tokenization program in October, when firms that keep assets at the clearinghouse will be able to convert some of their securities into tokens, according to the report. 

DTCC safeguards more than $114 trillion in securities, and its subsidiaries processed securities transactions valued at $4.7 quadrillion last year, according to the report.

The US Securities and Exchange Commission (SEC) gave Depository Trust Co., a DTCC subsidiary, approval late last year to operate a tokenization service for the real-world assets it safeguards, though the scope was limited to highly liquid assets.

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