Wall Street’s blockchain shift reaches bank payments and securities

At Money 20/20 in Las Vegas on October 20, financial firms described blockchain services moving from plans toward operation, including bank deposit transfers and a Depository Trust Company securities-tokenization service in development. The shift matters because these systems can move money or securities outside traditional operating windows while keeping them within institutional infrastructure. Axios reported from the event that Citi’s tokenized-deposit service operates in seven markets and lets clients move funds between Citi accounts on a private blockchain.

The developments use blockchain as a record and transfer layer. They do not require customers to use bitcoin or another cryptocurrency. For banks, tokenized deposits represent commercial bank money held on deposit. For securities, DTC’s planned service represents entitlements to assets that remain held in its system.

How will DTC’s tokenized securities work?

DTC’s service will let eligible participants tokenize selected securities held at DTC and manage the resulting tokenized security entitlements. According to DTCC’s service FAQ, participants will be able to mint and burn tokens and transfer them between DTC-registered digital wallets, with transfers available around the clock.

The service is voluntary and limited to DTC participants and their clients. DTCC says production launch is expected in the fourth quarter of 2026, under a three-year authorization from an SEC no-action letter issued in December 2025. The initial eligible assets include select Russell 1000 equities, ETFs tracking major indexes, and U.S. Treasury bills, notes and bonds. The launch is expected to support wallets connected to Canton Network and Hyperledger Besu.

The token represents an entitlement tied to a DTC-held security. DTC’s role in custody and servicing continues, while registered wallets and token minting and burning provide a route between the traditional securities environment and blockchain networks. The model therefore depends on DTC’s controls and the approved networks; it does not turn the underlying securities into freely transferable tokens on any public chain.

What are banks putting on chain?

Banks are using tokenized deposits to represent money already held in customer accounts. Axios reported that Citi’s service moves funds between Citi accounts over a private blockchain and is live in seven markets. That is an internal bank payment path: the blockchain records movements within Citi’s system, rather than creating a deposit token that can move freely between unrelated institutions.

That distinction separates tokenized deposits from stablecoins. A tokenized deposit remains a bank deposit, while the ledger changes how the bank records and transfers it. Citi’s reported rollout shows the service is operating across multiple markets, but the report does not specify supported currencies, transaction volumes or the technical design of the private chain.

What could prevent these systems from connecting?

Each institution’s ledger and asset representation needs a route to the others before customers can move value as easily across firms as within one. DTC’s approach relies on registered wallets and approved networks. Citi’s reported service moves funds between Citi accounts. Neither report establishes that a tokenized deposit can settle directly against a DTC token or another bank’s ledger.

Separate tokenization systems could also produce different digital representations of the same asset. Axios noted that this could fragment liquidity and make reliable pricing harder. For DTC, the defined asset set, participant eligibility, and wallet-registration process constrain how tokens move. The infrastructure is reaching production, but interoperability and the relationship between each token and its underlying asset remain central to whether institutional users can transact across systems.

Sources and documents

• Axios reported from the event — axios.com
• DTCC’s service FAQ — dtcc.com