Architecture: ComposerX, Canton, Digital Asset and Chainlink
The initiative combines DTCC’s ComposerX platform suite, the Canton Network as the ledger, Digital Asset as the platform architect and Chainlink as a Super Validator responsible for securing market data and cross-chain messages. ComposerX will interface with custodians and legacy systems to manage the lifecycle of tokenized assets, while Canton, Digital Asset and Chainlink collectively provide the execution, privacy and data infrastructure for the pilot.
A “digital twin” — a blockchain-based electronic record representing a specific underlying asset — will be minted only after custodial verification and immobilization of the original book-entry securities, ensuring alignment with DTC’s existing system of record. By locking the original securities and issuing a reconciled digital twin on Canton, the model seeks to maintain legal continuity between traditional custody and on-chain representation.
The tokenization workflow is described in four operational steps covering asset creation, collateral delivery, collateral return and closeout, all orchestrated through ComposerX and Canton. During creation, the custodian verifies positions in DTCC records and instructs ComposerX to mint the digital twin on Canton while the underlying securities are immobilized, establishing controlled on-chain collateral that remains anchored to DTC records.
For collateral delivery in margin and settlement workflows, transfers occur atomically on Canton, with Chainlink Data Streams providing real-time valuations for margin calculations and risk management. Collateral return and release are likewise executed as atomic operations that restore the original status of assets, while default closeout relies on predefined smart contract logic and Chainlink feeds to enable secured parties to seize tokenized collateral with full on-ledger traceability.
Chainlink’s Cross-Chain Interoperability Protocol (CCIP) is integrated to support compliant communication between Canton and other blockchain domains where required, while Data Streams supply definitive price and valuation inputs to margining and liquidation processes. This combination of CCIP and Data Streams is designed to deliver standardized cross-chain messaging and high-integrity market data to support institutional-grade collateral workflows.
The SEC no-action letter granted to a DTCC subsidiary defines the regulatory perimeter and conditions that allow the pilot to operate, including its three-year duration and constrained asset scope. The Canton Network’s permissioned architecture, featuring configurable privacy controls and controlled data visibility, is explicitly positioned to satisfy confidentiality, compliance and supervisory expectations for institutional participants.
DTCC will assume a leadership role in Canton Network governance, sharing foundation stewardship with other institutional actors to shape standards, operational rules and risk-allocation mechanisms. The governance model and reconciliation process between on-ledger records and traditional custody, anchored in immobilization of underlying securities and a reconciled registry, are intended to secure legal certainty for tokenized holdings.
The project targets increased settlement efficiency, improved collateral mobility and 24/7 tradability of tokenized instruments, with plans to expand beyond Treasuries into selected equity indices and ETFs over time. Atomic settlement and near-real-time visibility aim to reduce settlement friction, optimize capital usage and reshape post-trade operations, while raising scrutiny on custody segregation, proof of immobilization, oracle integrity and governance structures that allocate operational and legal responsibility.
The next verified milestone is the pilot launch scheduled for late 2026, which will test the model under live conditions across custodians, exchanges and clearing counterparts. Outcomes from the pilot will determine whether tokenized securities progress from a controlled experiment to broader operational adoption in core market infrastructure.