Two Routes to Tokenized Equities: DTCC Entitlements vs Transfer-Agent Registry
Tokenized US equities now have two live routes to market, and they reflect a genuine architectural split. The DTCC route, cleared by the SEC's Division of Trading and Markets in December 2025 via a no-action letter, treats the chain as a settlement-rail upgrade: the underlying security never leaves DTC custody, and what gets minted is a tokenized entitlement that DTC can reverse, holdable only by DTC participants. The transfer-agent route, ratified by Securitize's partnership with Computershare and by Bullish's $4.2B acquisition of Equiniti, tokenizes at the registry instead of the depository: the token is the share, recorded by the transfer agent, holdable in any wallet, with full voting rights and direct issuer-to-shareholder corporate actions. Neither is a full disintermediation of the other. Both are now actively being built. The fact that the two largest US transfer agents have publicly aligned with the registry route suggests the depository's monopoly on "where the canonical record of equity ownership lives" is finally being contested at the right altitude.
The Architectural Split
Both routes deliver something a sophisticated reader could call "tokenized equity," but they answer the same question in materially different ways. The question is: where does the canonical record of equity ownership live in a tokenized world? The two camps' answers reflect their respective views of which incumbent infrastructure deserves to remain the source of truth.
Read together, the two routes are asking different strategic questions. DTCC is asking whether blockchain can make existing capital markets infrastructure faster and more programmable, with the existing chain of intermediaries intact. Securitize, Bullish, and the transfer agents they've aligned with are asking whether the depository layer is the right place for the canonical record of equity ownership in a world where balance sheets increasingly live in wallets. The first is incremental modernization. The second is a quiet referendum on the depository's role.
Route 1: DTCC Tokenized Entitlements
The Securities and Exchange Commission's Division of Trading and Markets issued a no-action letter in December 2025 clearing the Depository Trust Company to launch a pilot of its tokenization services. The structure DTC adopted has several non-negotiable design choices that follow from its institutional position.
| Design choice | What it means in practice |
|---|---|
| Underlying never leaves DTC | The actual security entitlement stays where it has always been: in DTC's custodial ledger. The token is a separate object that points back to that entitlement. |
| Token is an entitlement, not a share | The token represents a DTC participant's claim on the underlying. The legal characterization of ownership is unchanged from the pre-tokenization regime. |
| DTC retains reversal authority | Root-wallet-style control: DTC can unwind transactions on its books, regardless of what the chain shows. The chain is advisory to DTC's risk-management process, not authoritative. |
| Token holders restricted to DTC participants | Broker-dealers and custodians, the existing intermediation chain. Retail investors don't hold these tokens directly; they hold them through their broker, exactly the way they hold shares today. |
| No collateral or settlement value | The tokens carry no incremental rights for DTC's risk-management framework. Margin and clearing run on the underlying entitlement, not on the token. |
The DTCC route inherits the depth of the existing intermediation chain on day one. If Goldman, Citi, BNY, and the rest of DTC's participant base are already connected to DTC's systems, tokenized entitlements get those participants for free. The cost is that almost nothing about the holding experience changes for end investors. The token cannot leave the universe of DTC participants. The corporate-actions flow still routes through nominee structures. The chain does what blockchain technology can do well (programmable transfers, more granular operational logging) without disrupting any of the institutional relationships that depend on DTC's role.
Stated bluntly: the DTCC route is tokenization as a settlement-rail upgrade, not a disintermediation event. That positioning is its strategic strength (regulatory comfort, scale, immediate institutional adoption) and its strategic ceiling (the architecture cannot be the foundation for a meaningfully different shareholder experience).
Route 2: Transfer-Agent Issuer-Sponsored Tokens
The Securitize-Computershare partnership and the Bullish-Equiniti acquisition are both bets on the registry layer. Computershare is the transfer agent of record for close to 60% of the S&P 500, including Apple, Tesla, Microsoft, Nvidia, and Coinbase. Equiniti has roughly 3,000 issuer clients and 20 million shareholders on its books. Together, those two firms own the registry layer for a meaningful share of US public equity. Their alignment with the tokenization-at-registry model is a substantive strategic statement.
The architectural premise is that the transfer agent's books, not the depository's, should be the canonical record of equity ownership. In the conventional system, a public-company share is held in "street name" by DTC's nominee Cede & Co; the actual beneficial owner is recorded several intermediation layers away. The transfer-agent route flattens this. An Issuer-Sponsored Token (IST) is a registered share at the transfer agent, recorded in the issuer's actual stockholder ledger, but held in a wallet the beneficial owner controls.
The practical consequences for a shareholder include three things the DTCC route cannot offer:
- Direct voting. Voting rights flow into the wallet rather than through nominee structures. Proxy voting via stockholder vote is a meaningfully shorter chain than the conventional path through Cede & Co plus the broker.
- Direct corporate actions. Dividends, splits, and rights offerings can route directly to the wallet, with the issuer receiving direct visibility into the beneficial owner. This is currently obscured in the street-name system.
- Wallet-native custody. The shareholder holds shares the way they hold stablecoins, with self-custody available for users who want it and standard custodial support available for users who don't.
This architecture has a known cost: the liquidity question. ISTs have to coexist with traditional shares (the same security tokenized at the registry can also exist in the conventional Cede & Co street-name format). Brokers, exchanges, and clearing houses still have to integrate the two formats. Until that wiring matures, tokenized pools risk being thinner than conventional pools, meaning tighter spreads on the conventional side and wider spreads on the tokenized side, exactly the friction tokenization was supposed to eliminate. Bullish's own announcement acknowledges this directly, citing planned interoperability with DTCC, Euroclear, and Clearstream.
The Tradeoffs, Stated Honestly
Neither route is strictly superior. The honest framing is that they optimize for different things and pay different costs.
| Dimension | DTCC route | Transfer-agent route |
|---|---|---|
| Day-one liquidity depth | Inherits DTC's $114T of custody and existing participant relationships. Liquid from the moment it's live. | Tokenized pools must be bootstrapped against existing conventional-share liquidity. Lower throughput in the bootstrapping window. |
| Regulatory comfort | SEC no-action letter cleared the framework. Existing legal characterization of ownership unchanged. | Newer architecture, new regulatory and legal questions to resolve as the model scales. |
| Architectural ambition | Tokenization as performance/programmability upgrade for existing rails. Limited by definition. | Moves the canonical record to the chain. Creates real disintermediation potential, but the wiring takes time. |
| End-investor experience | Unchanged from today's holding experience. Token cannot leave DTC participant universe. | Materially different: wallet custody, direct voting, direct corporate actions, self-sovereign holding option. |
| Issuer relationship | Issuer-to-shareholder relationship continues to flow through nominee/intermediary structures. | Issuer can see and communicate with the beneficial owner directly. Material change for cap-table management and corporate actions. |
The tradeoffs are not strictly mutually exclusive. A given share can plausibly exist as both a DTC-custodied entitlement and a transfer-agent-recorded IST simultaneously, with the holder choosing which format to hold based on their use case. The transfer-agent camp is openly designing for coexistence with the depository rather than around it (Bullish's announcement makes this explicit). Whether that coexistence is stable in the long term, or whether one model eventually dominates, is the open strategic question.
Where This Goes
Three plausible trajectories follow from the current setup. The honest framing is that none of them is overwhelmingly likely; the path depends on regulatory choices, broker support and onboarding speed, and end-investor demand for the differentiated holding experience the transfer-agent route makes possible.
Trajectory A: Coexistence with depository dominance
DTCC tokenized entitlements scale faster because of the existing participant network. ISTs become a niche product favored by retail crypto-native users and a small set of institutions optimizing for direct-shareholder relationship management. Most equity volume continues to settle through DTC, and the chain becomes a programmability layer rather than a disintermediation event. Probability is non-trivial because it requires the least change from any incumbent.
Trajectory B: Coexistence with registry dominance over time
Transfer-agent ISTs scale because the differentiated experience (direct voting, direct corporate actions, wallet-native custody) attracts a generation of investors who treat self-custody as default. Broker support matures, liquidity question resolves, and the depository's role contracts toward a settlement-rail-of-last-resort function. Probability requires that retail equity ownership behavior shifts toward self-custody, which is a meaningful behavioral assumption over a multi-year horizon.
Trajectory C: Bifurcation by issuer choice
Issuers with stockholder bases that value direct relationships (founder-led companies, dual-class structures, retail-heavy holders) move toward IST as the default registration. Issuers with stockholder bases that are predominantly institutional and indexed continue to settle through DTC. Each ecosystem has its own infrastructure stack. This is the messiest outcome but also the most plausible if neither side achieves overwhelming dominance.
The fact that the two largest US transfer agents have now publicly aligned with the registry vision tilts the field. Computershare and Equiniti chose this side actively, with strategic capital and partnership commitments. Their counterpart on the depository side is DTCC itself, which is acting through a more conservative pilot framework. The architectural ambition is concentrated on the registry side; the institutional weight is concentrated on the depository side. Time will tell which factor compounds faster.
What to Watch
Five concrete watch items for the next 6 to 12 months as the two routes progress:
- First mass-market US issuer to mint ISTs. Computershare's transfer-agent client base includes Apple, Tesla, Microsoft, Nvidia, and Coinbase. The first of those five (or a comparable consumer-recognizable ticker) to actually mint Issuer-Sponsored Tokens alongside its existing shares is the moment ISTs cross from infrastructure announcement into market reality. The choice of issuer will signal whether the market is ready.
- Bullish-Equiniti deal close and onboarding timeline. The $4.2B acquisition was announced; close, regulatory approval, and operational onboarding are downstream questions. A delayed close or contested approval would slow the transfer-agent camp's momentum materially.
- DTC pilot live volume. The SEC no-action letter cleared the pilot; actual transaction volume on the DTC tokenized-entitlement framework is the test of whether participants are using the new architecture or just acknowledging its existence.
- Broker support for ISTs. Coinbase, Robinhood, Schwab, Fidelity, IBKR, the brokers that would offer ISTs alongside conventional shares are the bottleneck for retail liquidity. The first major broker to support IST holding alongside conventional shares is the proof point that retail liquidity bootstraps cleanly.
- Cross-border interoperability. Bullish referenced planned interoperability with DTCC, Euroclear, and Clearstream. Of those three, the European depositories' positioning matters most: if Euroclear and Clearstream pursue parallel registry-based architectures, the transfer-agent model has international support. If they only support the DTCC-style entitlement model, ISTs remain a US-domestic phenomenon.
Closing Thoughts
For TokenIntel users, the immediate translation of this development is limited. Tokenized equities are not in TI's signal universe, and there is no near-term scenario in which Apple-IST or Tesla-IST becomes a tracked TI asset. The relevance is upstream of the signals. The DeFi protocols TI does cover (Aave, Morpho, Maker-Sky, Ondo, Maple) increasingly hold tokenized RWAs as collateral or reserve composition. Tokenized equities are the next category in that pipeline after tokenized Treasuries (covered in the BUIDL report) and tokenized credit (Maple, Centrifuge). The architecture choice between depository and registry routes matters because it determines what kind of equity tokenization a DeFi protocol can integrate as collateral over the next 24 months.
The non-obvious read is the strategic one. Tokenized credit (Maple, Centrifuge) and tokenized Treasuries (BUIDL, FOBXX, USTB) found their first product-market fit in DeFi rather than in TradFi distribution. The tokenized-equity story is the next test of that pattern. If ISTs find their first scaled adopters in DeFi protocols building wallet-native shareholder products, the registry route compounds quickly. If ISTs are positioned to TradFi institutions through conventional sales channels, they likely repeat the pattern of earlier tokenization waves that did not find product-market fit. The first major product built on top of an IST should tell us which path we're on.