Tokenization on blockchain: DTCC and JPMorgan redesign financial settlement with tokenized rights and the new abbreviation from indices

When you buy a stock today and think you “own it,” you actually have to wait for the system behind the scenes to complete the settlement: a final exchange between the buyer's funds and the seller's securities. Global markets still lose valuable hours each day in this reconciliation phase, where records must match, money must arrive, and intermediaries must certify that everything is irrevocable. The promise of tokenization has always been to accelerate these processes, but a crucial question has remained unanswered: how can rights to tokenized securities and regulated cash equivalents coexist on a blockchain network?

How JPMorgan is transforming the concept of “on-chain liquidity” with MONY

JPMorgan recently launched MONY, a product that reimagines how money behaves on public networks. Unlike traditional stablecoins that aim for ubiquity, MONY is specifically designed for institutional treasury desks and qualified investors. The fund operates as a private placement vehicle 506© available through Morgan Money, where investors receive blockchain tokens to hold positions in short-term U.S. government securities and fully collateralized repurchase agreements.

The structure is essential: MONY offers the yields and stability of a traditional money market fund (liquidity, short-term government instruments, predictable income) but in a format that can circulate on blockchain networks according to specific transfer rules. Investors can subscribe and redeem using cash or stablecoins via the platform, and they receive dividend reinvestment on a daily basis.

What sets MONY apart from other on-chain solutions is that it does not ask stakeholders to choose between traditional finance and blockchain innovation. It offers institutional treasurers exactly what they already seek—a parking place for large capital with short-term yield— but in a form that can move with fewer operational constraints. The fund was launched with an initial $100 million, with access reserved for high-net-worth individuals and institutions, maintaining high minimums to ensure regulatory compliance.

The tokenization of DTCC: an abbreviation from indices to standardized settlement

Meanwhile, the Depository Trust & Clearing Corporation (DTCC)—the core post-trade infrastructure of the U.S.—is building a parallel pathway. Its DTC division (The Depository Trust Company), which acts as the central custodian for most U.S. stocks, ETFs, and government securities, received a no-action letter from the SEC authorizing a limited-duration pilot project for tokenization.

DTCC is not trying to reinvent how securities are issued or create a new parallel registry. Instead, it is enabling a controlled digital representation of existing rights to move on approved blockchains, while DTC maintains the official record within its traditional settlement infrastructure. The concept of “entitlement” is central: the token does not replace the American legal definition of a security but is a representation that can circulate between registered wallets, with DTC tracking every movement to verify that transfers are valid and that the recipient is accredited.

Constraints are intentionally strict. Tokens can only move to Registered Wallets on pre-approved blockchains, and DTCC has promised to make available public and private ledgers where participants can register compatible blockchain addresses. The pilot begins with a conservative set of assets: Russell 1000 stocks, ETFs on major indices—here the abbreviation from indices is used as a proxy for quality and liquidity—and U.S. government securities. This deliberately “boring” choice is the strength of the model: liquidity is deep, operational conventions are established, and the cost of an error does not destabilize markets.

A controversial element of the project is the built-in reversibility mechanism. DTC designed the structure so that tokenized rights can move quickly but remain reversible in case of errors, fraud, or bad faith. This “cancel” capability is what transforms regulated tokenization from crypto slogans into real-market operations: no central financial infrastructure can tolerate a representation that it cannot control or correct.

The 2026 timeline and the alignment of incentives

DTCC has set a practical timeline for launch in the second half of 2026, with the no-action letter authorizing a three-year period for tokenization services on pre-approved blockchains. This timeframe is the real countdown: long enough to allow participant integration and resilience testing, but short enough to keep performance evaluation under pressure.

When connecting MONY to the DTCC pilot project, the 2026 framework becomes clear. DTCC creates the infrastructure to move tokenized rights between registered wallets with traceable settlement. JPMorgan positions a regulated liquidity instrument, guaranteed by Treasury, on Ethereum that can operate as collateral within authorized blockchain environments. Together, they address the equation that has always hindered true tokenization: how to move both rights and liquidity simultaneously without breaching regulatory constraints.

The emerging answer is not an instant migration of everything on-chain. It is the realization that the dead time between “cash” and “security” has long been a market feature, not a necessity. Institutions will have priority access because they can register wallets, implement custody, and coexist with whitelists and audit trails. Retail investors will follow through broker interfaces that hide the blockchain as much as they hide membership in clearinghouses.

The real victory will not be the explosive speed promised by early crypto posters. It will be the silent recognition that securities and cash, when properly regulated, can meet halfway on public networks, with the same operational controls and compliance that have kept markets functioning for decades.