Understanding Tokenization: What Really Differs Between the DTCC Model and Direct Ownership

Over the past two years, “tokenization” has moved from a crypto-native buzzword to a boardroom agenda item. Yet not all tokenization is created equal. Much of what’s happening in U.S. equities and funds relates to market infrastructure modernisation led by DTCC, while a parallel track aims to put the ownership of securities directly on-chain. This article clarifies the difference, why it matters in 2025, and how investors and builders should prepare.

Two paths that share a word but not an architecture

• DTCC model: digitising today’s market plumbing
  DTCC is progressively embedding distributed ledger technology (DLT) into clearing, settlement, and data distribution without changing who legally owns U.S. securities. Examples include the DLT-based alternative settlement rail in Project Ion and the Smart NAV initiative to publish mutual fund price and rate data on-chain. In both cases, DTC’s classic systems remain the authoritative record, and end-investors continue to hold through intermediaries in “street name.” See DTCC’s announcement that Ion runs in parallel while DTC remains the golden record, the Smart NAV pilot overview, and the SEC’s T+1 rule that DTCC helped operationalise. (dtcc.com)

• Direct ownership model: tokenising the security itself
  Here, the issuer’s share register (or transfer agent ledger) is implemented on a blockchain, and the investor can be the on-chain record owner. U.S. corporate law already permits this: Delaware’s 2017 DGCL amendments allow stock ledgers to be kept on “one or more distributed electronic networks,” paving the way for natively digital corporate records and transfers. (legis.delaware.gov)

These are fundamentally different designs: the first upgrades back-office rails; the second redefines the locus of ownership.

What DTCC is (and isn’t) changing

• Faster, safer settlement cycles
  The U.S. moved to T+1 on May 28, 2024, reducing counterparty risk and capital drag. That shift was a regulatory change implemented through existing DTCC rails, not a wholesale tokenisation of equities. Post-cutover, the SEC reported a smooth transition, with industry data showing fails remained roughly stable. (sec.gov)

• DLT as an efficiency layer, not a replacement registry
  Project Ion demonstrates netted T+0–T+2 capability on a permissioned DLT while DTC’s ledger remains the source of truth. Smart NAV explored publishing trusted fund data to multiple chains via Chainlink interoperability so tokenised funds and apps can consume the data. Neither initiative makes your brokerage shares into public-chain tokens. (dtcc.com)

• New in December 2025: tokenised entitlements for DTC‑custodied assets
  DTCC disclosed that the SEC staff granted DTC no‑action relief to pilot a service that tokenises real‑world, DTC‑custodied assets on pre‑approved blockchains. Crucially, the program tokenises participants’ “security entitlements” and records them against a DTC digital omnibus account—an infrastructure innovation that could enable 24/7 transfer of entitlements among participants, not retail self‑custody of listed stocks. (dtcc.com)

Bottom line: the DTCC track improves the current model’s speed, resiliency, and composability; it does not (yet) replace the transfer agent/central depository stack or shift record ownership to individual wallets. For a primer on “street name” versus registered ownership, see the SEC’s investor bulletin. (investor.gov)

What “direct ownership” really looks like

In the direct model, the issuer’s cap table lives on-chain. Transfers settle as ledger updates to the official stock register (often via a regulated transfer agent smart contract), enabling programmability of corporate actions and potentially atomic settlement against tokenised cash. Delaware’s DGCL permits blockchains for corporate records if they can produce legible paper and meet statutory functions for stockholder lists and transfer recording—requirements compatible with permissioned or public chains. (legis.delaware.gov)

While most public equities are not issued this way, adjacent precedents are emerging in tokenised funds and treasuries. BlackRock’s BUIDL fund launched on Ethereum in March 2024 with Securitize as transfer agent and has since added cross‑chain share classes, even expanding to Solana in March 2025. These are not exchange‑listed equities, but they showcase real‑world assets with on‑chain ownership records and programmable distributions. (wsj.com)

Side‑by‑side: DTCC model vs direct ownership

• Ledger of record

  • DTCC model: DTC/transfer agent remains authoritative; DLT mirrors or carries entitlements. (dtcc.com)
  • Direct ownership: the blockchain smart contract is the issuer’s stock ledger under corporate law. (legis.delaware.gov)

• Who can custody

  • DTCC model: participants and brokers; beneficial owners sit behind intermediaries in street name. (dtcc.com)
  • Direct ownership: investors may be record holders and, where allowed, can self‑custody in compliant wallets.

• Settlement mechanics

  • DTCC model: netting, CCP protections, and DTC finality; DLT aims at intraday or T+0 options while preserving existing risk controls. (dtcc.com)
  • Direct ownership: potential for atomic delivery‑versus‑payment with tokenised cash on shared ledgers, a direction highlighted by the BIS “unified ledger” blueprint. (bis.org)

• Corporate actions and governance

  • DTCC model: issuer communications and proxy flows route via DTC omnibus proxy to participants. (dtcc.com)
  • Direct ownership: proxies, dividends, and restrictions can be encoded at the token level, subject to securities law and transfer agent rules.

Why this distinction matters in 2025

• Policy and plumbing are converging
  With T+1 live and stable, attention is shifting to same‑day and 24/7 cycles. DTCC’s 2025 no‑action relief pilots after‑hours tokenised entitlements—powerful for liquidity and collateral mobility inside today’s framework. (sec.gov)

• Tokenised cash‑like assets are gaining traction
  Tokenised U.S. Treasuries have become a preferred on‑chain collateral and cash management tool. As of December 20, 2025, RWA.xyz shows nearly $9B outstanding, up sharply year‑to‑date, with institutional issuers such as BlackRock and Franklin Templeton expanding distribution and use cases. (app.rwa.xyz)

• The macro blueprint is getting clearer
  Central banks and market infrastructures are coalescing around tokenised, programmable platforms that knit together reserves, deposits, and government bonds. The BIS’s 2025 report frames how securities markets benefit when money and assets settle on shared ledgers. (bis.org)

Practical implications for builders and investors

1. If you’re integrating with the DTCC model

   • Expect APIs or gateways to permissioned networks, with DTC remaining the book of record.
   • Design for entitlements mobility, intraday collateral optimisation, and out‑of‑hours transfers among participants—rather than direct retail self‑custody. Read DTCC’s description of Ion’s parallel processing and the December 2025 entitlements pilot to understand boundaries. (dtcc.com)

2. If you’re pursuing direct ownership tokenization

   • Work with counsel and a registered transfer agent to make the on‑chain ledger the official stock register under DGCL §224, including auditability and paper convertibility.
   • Build compliance primitives (KYC/AML, transfer restrictions, lockups) into the token contract and ensure your wallet stack supports policy‑based controls. See Delaware’s statutory framework for stock ledgers on distributed networks. (legis.delaware.gov)

3. Investor experience

   • In the DTCC model, your brokerage statement remains your evidence of beneficial ownership; voting typically flows via intermediaries. Review the SEC’s bulletin on street name vs direct registration. (investor.gov)
   • In direct ownership systems, you may hold the security in a qualified wallet as the record owner, with on‑chain dividend accrual and corporate actions—similar to how tokenised funds like BUIDL distribute yields on-chain. (wsj.com)

FAQs

• Is “DTCC tokenization” the same as putting NYSE stocks on Ethereum?
  No. DTCC’s current programs either run DLT in parallel to existing systems or tokenise entitlements within DTC custody. They do not convert public‑equity shares into free‑floating public‑chain tokens held by retail investors. (dtcc.com)

• Could both models coexist?
  Yes. Market‑infrastructure tokenization can improve netting, risk management, and data integrity, while direct ownership can unlock programmability and atomic settlement for issuers that choose it. The BIS’s “unified ledger” vision anticipates multiple tokenised instruments interacting under sound‑money principles. (bis.org)

• What are credible near‑term opportunities?
  Tokenised cash‑equivalents (treasuries, MMFs) as on‑chain collateral and liquidity. Growth and institutional adoption accelerated in 2025 as funds expanded to multiple chains and venues. (prnewswire.com)

Security and self‑custody: preparing for direct ownership

When issuers allow direct, on‑chain record ownership, key management becomes paramount. A hardware wallet with offline private‑key storage, open verification, and robust multi‑chain support helps investors exercise governance rights, sign compliant transfers, and hold tokenised assets without introducing a new intermediary. OneKey focuses on secure, user‑controlled key management and multi‑network compatibility—capabilities that map cleanly to direct‑ownership tokenization where holders may need to sign corporate actions, attest to transfer restrictions, or participate in on‑chain votes.

If your tokenized RWA or equity program contemplates record‑owner self‑custody, consider requiring hardware‑backed keys and policy‑based signing to reduce operational and counterparty risk while preserving investor UX.

Key references and further reading

• DTCC Project Ion overview and “parallel production” disclosure; DTC remains the authoritative record. (dtcc.com)
• DTCC Smart NAV pilot: bringing trusted fund data to blockchains. (dtcc.com)
• SEC press release on U.S. T+1 implementation (effective May 28, 2024). (sec.gov)
• DTCC press release and Business Wire on DTC’s 2025 no‑action letter for tokenising DTC‑custodied assets; Dechert client note on tokenised entitlements. (dtcc.com)
• SEC Investor Bulletin: holding securities in street name vs direct registration. (investor.gov)
• Delaware General Corporation Law (2017 amendments) enabling blockchain stock ledgers. (legis.delaware.gov)
• BlackRock BUIDL launch and multi‑chain share classes; expansion to Solana (Securitize). (wsj.com)
• RWA.xyz dashboard for tokenised treasuries (snapshot as of December 20, 2025). (app.rwa.xyz)
• BIS 2023–2025 reports on tokenised “unified ledgers” for money and securities. (bis.org)

---

Getting the taxonomy right helps teams choose the correct architecture, controls, and custody model. The DTCC path is about making the existing market safer and faster; the direct‑ownership path is about redefining who sits on the ledger. As these two tracks converge, investors and builders alike should align their wallet, compliance, and data strategies accordingly—and, if direct ownership is on your roadmap, harden your self‑custody stack now to capture the benefits of truly on‑chain securities.