Deng Tong, Jinse Finance
On December 11, 2025, the Depository Trust Company (DTC) received a no-objection letter from the U.S. Securities and Exchange Commission (SEC), allowing it to tokenize a portion of its custodial assets. DTC aims to leverage blockchain technology to connect traditional finance (TradFi) and decentralized finance (DeFi), thereby building a more resilient, inclusive, and efficient global financial system. Previously, the Office of the Comptroller of the Currency (OCC) issued Explanatory Letter 1188, confirming that national banks can engage in permitted banking activities related to risk-free principal crypto asset transactions.
This article focuses on the recent regulatory actions taken by the U.S. SEC and OCC.
1. SEC: DTCC can tokenize stocks, bonds, and Treasury bonds.
Yesterday, the Depository Trust & Clearing Corporation (DTCC) announced that its subsidiary, Depository Trust Company (DTC), has received a No-Agreement Letter (NAL) from the U.S. Securities and Exchange Commission (SEC), authorizing it to offer a new service in a controlled production environment, within the framework of federal securities laws and regulations, for the tokenization of real-world assets held in custody by DTC. DTC expects to begin launching the service in the second half of 2026.
The no-action letter authorizes DTC to provide tokenization services to DTC participants and their clients on a pre-approved blockchain for a period of three years. According to the no-action letter, DTC will be able to tokenize real-world assets, with their digital versions enjoying the same rights, investor protections, and ownership as traditional assets. Furthermore, DTC will provide the same level of resilience, security, and robustness as traditional markets.
This authorization applies to a range of specific highly liquid assets, including the Russell 1000 index (representing the 1000 largest U.S. listed companies by market capitalization), ETFs tracking major indices, and U.S. Treasury bills, bonds, and notes. This no-action letter is significant because it allows the DTC, subject to certain restrictions and statements, to launch the service faster than usual once it is finalized.
The SEC's no-objection letter is a key driver of the company's broader strategy to advance a secure, transparent, and interoperable digital asset ecosystem and fully realize the potential of blockchain technology.
Frank Lassara, President and CEO of DTCC, stated, “I would like to thank the U.S. Securities and Exchange Commission (SEC) for their trust in us. Tokenization of the U.S. securities markets promises many transformative benefits, such as collateral liquidity, new trading models, 24/7 access, and programmable assets, but this can only be realized if the market infrastructure is firmly established to meet this new digital age. We are very excited to take this opportunity to further empower the industry, our participants, and their customers, and drive innovation. We look forward to collaborating with all stakeholders in the industry to securely and reliably tokenize real-world assets, thereby driving the future of finance for future generations.”
To support this strategy, DTCC's tokenization scheme will enable DTC participants and their clients to leverage comprehensive tokenization services powered by the DTCC ComposerX platform suite. This will allow DTC to create a unified liquidity pool across the traditional finance (TradFi) and decentralized finance (DeFi) ecosystems, building a more resilient, inclusive, cost-effective, and efficient financial system.
According to the no-action letter, DTC is authorized to offer limited production environment tokenization services on L1 and L2 providers. DTCC will provide more details on listing requirements (including wallet registration) and the L1 and L2 network approval process in the coming months.
SEC Chairman Atkins stated that on-chain markets will bring investors greater predictability, transparency, and efficiency. DTC participants can now directly transfer tokenized securities to other participants' registered wallets, and these transactions will be tracked by DTC's official records. This move by DTC marks a significant step towards on-chain capital markets. I am pleased to see the benefits this initiative brings to our financial markets and will continue to encourage market participants to innovate to drive us toward on-chain settlement. But this is just the beginning. I look forward to the SEC considering granting innovation exemptions, allowing innovators to leverage new technologies and business models to begin transitioning our markets on-chain without being constrained by cumbersome regulatory requirements.
II. OCC: Crypto companies that obtain banking licenses are treated the same as other financial institutions.
On December 8, Jonathan Gould, the Comptroller of the Currency (OCC), stated that cryptocurrency companies seeking a U.S. federal banking license should be treated the same as other financial institutions.
So far this year, the OCC has received 14 applications to establish new banks, "including some from entities engaged in new or digital asset activities," which is almost the same number of similar applications the OCC has received in the past four years. "The charter system helps ensure that the banking system keeps pace with financial development and supports modern economic growth. Therefore, institutions engaged in digital asset and other emerging technology-related businesses should have the opportunity to become federally regulated banks."
The regulator “receives letters from existing national banks almost daily about their exciting initiatives in launching new products and services. All of this reinforces my confidence in the OCC’s ability to effectively regulate new entrants and new business from existing banks in a fair and impartial manner.”
Jonathan Gould, Comptroller of the Currency, speaks at the Blockchain Association Policy Summit 2025. Source: YouTube
III. What impact will the policy directions of the SEC and OCC have?
With the DTC's approval to tokenize core assets such as stocks, bonds, and ETFs on-chain, real-world assets are being formally incorporated into the US federal securities system. This means that core asset classes in traditional financial markets will have "native versions" on the blockchain and enjoy all the legal rights of traditional assets. The OCC has explicitly stated that institutions engaged in digital asset business can apply for federal banking licenses on an equal footing with traditional institutions, signifying that the crypto industry has, for the first time, a formal path to the "compliance core layer" of the US banking system. The regulatory trends of the SEC and OCC are essentially a competition between the US and global standards for digital finance. As blockchain technology becomes financial infrastructure, the US is adopting a model similar to that of the internet era: leading global rule-making through institutional and regulatory frameworks.
Appendix 1: Main points of Gould's speech:
Several of the applications currently submitted to the OCC are for the establishment of a new National Trust Bank or for banks wishing to convert to a National Trust Bank. This increase indicates healthy market competition, reflects a commitment to innovation, and should be encouraging for all of us. The number of applications has returned to the OCC's normal levels, consistent with past experience and practices.
Since the 1970s, the OCC has been responsible for issuing charters to National Trust Banks, a power explicitly granted to the Board of Bank Supervision (ABC) by Congress in 1978. Currently, the OCC regulates approximately 60 National Trust Banks. Some banks and their industry associations have expressed concern about certain pending applications. They point out that approving these applications would violate OCC precedent, as it would allow National Trust Banks to engage in non-trusteeship activities.
What they failed to acknowledge is that for decades, the OCC has permitted National Trust Banks to engage in non-trusteeship activities. In fact, prohibiting National Trust Banks from engaging in non-trusteeship activities would not only threaten the dynamics of the federal banking system but also disrupt the existing trillion-dollar traditional business of National Trust Banks.
According to relevant regulations, National Trust Bank must limit its business activities to the operations of a trust company and related activities. Despite recent opposing claims, since the OCC began issuing National Trust Bank charters, non-trust activities, particularly custody and safekeeping, have remained entirely within its authorized scope of business.
In fact, most national trust banks already engage in this business, including uninsured national trust banks that are subsidiaries or affiliates of full-service insured national or state banks. In the third quarter of this year, national trust banks reported that they managed nearly $2 trillion in non-custodial or custodial assets, representing approximately 25% of their total assets under management.
Therefore, if non-trust custody and safekeeping services are deemed unacceptable for pending franchise applications, the legitimacy of existing and well-established national trust banking operations, which could disrupt the flow of funds in existing economic activities, also needs to be reassessed. While the proposed businesses of some new franchise applicants (particularly those in the digital or fintech sectors) may be considered new to national trust banking, custody and safekeeping services have been conducted electronically for decades.
For example, banks, including the existing National Trust Bank, typically hold corporate tickets and customer custody rights electronically. Therefore, there is no reason to treat digital assets differently. Furthermore, we should not confine banks (including the existing National Trust Bank) to past technologies or business models.
This is tantamount to decline. The business activities of National Trust Bank have changed, and so have those of other banks across the country. State trust companies are now also involved in digital asset-related activities. For example, several states, including New York and South Dakota, have authorized their trust companies to offer digital asset-related services, including custody services, to clients.
Some existing banks/credit associations have also expressed concerns about potential unfairness or the OCC's lack of oversight capacity to monitor new activities proposed by existing applicants. These concerns could hinder innovative initiatives that could better serve bank customers and support the local economy.
As I mentioned earlier, the OCC has been overseeing the activities of National Trust Bank for decades, ensuring that both trustee and non-trustee activities (involving the management of millions of dollars in assets) are conducted in a safe, sound manner and in accordance with applicable laws.
The OCC has years of experience regulating a cryptocurrency-native bank, National Trust Bank, and receives feedback from the existing National Trust Bank almost daily regarding its innovative products and services. All of this strengthens my confidence in the institution's ability to effectively regulate new entrants and new business ventures of existing banks in a fair and impartial manner.
We welcome the initiatives of existing banking institutions and will ensure that both new and established institutions are treated fairly and adhere to the same high standards, given similar business activities and risks. One of the greatest strengths of the federal banking system is its ability to evolve from the telegraph era to the blockchain era and to actively embrace new technologies to provide banking products and services to customers from rural to urban centers. Despite Congress's reforms of national banks more than 160 years ago, they remain a vital part of the U.S. financial system. This is no accident. Rather, it is a direct result of Congress and the courts' long-standing recognition that banks can and must adapt and develop new ways to conduct their long-standing businesses. Preventing national banks (including National Trust Banks) from engaging in reasonably permissible activities simply because their activities are considered new or different from those of large technology markets undermines this fundamental premise. This could lead to economic stagnation and potentially have profound consequences for the banking system.
Appendix 2: What other non-action letters has the SEC issued recently?
A no-action letter, originating from the U.S. legal system, is a formal written document issued by a regulatory agency upon request from an entity or individual it regulates, indicating that the agency will not take legal or enforcement action if the entity or individual carries out the action as described in the application. Its core function is to eliminate regulatory uncertainty; it is not a legally binding document.
On September 29, 2025, the SEC issued a no-action letter indicating that, based on the facts described, the SEC would not recommend enforcement action regarding a certain token issued by DoubleZero. This move was seen as a significant signal of regulatory shifts in the crypto market, representing a greater willingness by regulators to make case-by-case rulings on certain issues concerning the classification of tokens as securities.
On September 30, 2025, the SEC’s Division of Investment Management issued a “No Action Letter” to Simpson Thacher, confirming that under certain conditions, state-chartered trust companies can be considered Rule 206(4)-2 (a qualified custodian under the Counsel Act) and custodians permitted under the Act of 1940, and the SEC will not take enforcement action against corporations and registered funds on this arrangement. This move helps traditional asset management firms gain a clearer regulatory position regarding crypto asset custody and compliance services.
