The Depository Trust & Clearing Corporation (DTCC) has announced its acquisition of blockchain startup Securrency Inc. in a deal worth approximately $50 million, according to a report from Bloomberg.
This acquisition is part of DTCC’s strategic move into blockchain technology and services, particularly in the area of post-trade processing of tokenized digital assets. The deal is expected to be finalized in the upcoming weeks, with 100 Securrency employees joining DTCC after the acquisition.
The Potential of Securrency’s Technology
“Securrency’s technology could allow DTCC to enable the issuance and trading of securities like exchange-traded funds (ETFs) on blockchain networks,” said DTCC CEO Frank La Salla.
DTCC sees this move as an opportunity to leverage Securrency’s technology to revolutionize the trading of financial assets. By combining DTCC’s position as a strategic infrastructure provider with blockchain networks, they aim to streamline complex post-trade processes.
In fact, industry analysts from Citigroup Inc. estimate that by 2030, as much as $5 trillion worth of traditional financial assets could be tokenized on blockchain networks. This represents a significant potential for the transformation of financial markets.
The Gradual Maturation of Blockchain in Finance
“I have found in the past 12 months the conversation has gotten much more grounded and sober around what distributed ledger technology can and should be used for,” said La Salla.
As blockchain technology matures, the conversation around its applications in finance has become more practical and focused. Major banks and financial institutions have already developed their own proprietary blockchain platforms for post-trade functions, similar to Securrency’s technology.
However, concerns have been raised about duplication of efforts and the lack of interoperability between these various blockchain systems. La Salla acknowledges the need for collaboration in the industry, stating that “the industry is graduating from this experimenting phase to how we work together.”
The Potential Benefits of Asset Tokenization
Asset tokenization offers a way to simplify trading and post-trade settlement processes, while also improving accessibility and liquidity in markets. This involves representing real-world assets, such as company shares, as digital tokens on a blockchain.
Securrency’s technology, for example, enables the creation of tokenized securities like ETFs that can be traded and settled on a distributed ledger. By eliminating the need for traditional market infrastructure, this has the potential to streamline and simplify post-trade systems.
DTCC seems to be positioning itself as a key player in the asset tokenization process as blockchain technology becomes more widely adopted.
Overall, this acquisition marks a significant step for DTCC in its embrace of blockchain technology and its ambition to transform financial markets.
