Tokenized securities transform the financial market: From regulatory breakthrough to mass market

The Institutional Turn in the Blockchain Finance World

The financial market is at a turning point. What was long considered a speculative fringe phenomenon is now developing into a strategic priority for the established financial industry. Recent developments show a clear pattern: traditional financial institutions like JP Morgan, UniCredit, and the Depository Trust Company (DTC) are increasingly relying on blockchain-based solutions. This is no longer just experimentation but a systematic integration of new technologies into core operational processes.

JP Morgan Opens the Door for Public Blockchains in Banking

The first step is a remarkable transaction: JP Morgan issued a $50 million Commercial Paper for Galaxy Digital Holdings on the Solana blockchain. This transaction is significant because one of the world’s largest investment banks used a public, decentralized blockchain for securities issuance for the first time—rather than relying on private or consortium systems.

The settlement was fully in USDC, a stable digital dollar. With this, JP Morgan demonstrated not only technical feasibility but also practical applicability for real-world financial instruments. The choice of Solana is particularly meaningful: the network offers high transaction speed and low fees—factors that are crucial for institutional large transactions.

SEC Confirms the Regulatory Framework

In parallel, the US Securities and Exchange Commission (SEC) issued a No-Action Letter to the DTC, granting the Depository Trust Company (a DTCC subsidiary) leeway for a tokenization program in a production environment. This is no random step—it is explicit regulatory approval for blockchain tokenization of stocks, exchange-traded funds (ETFs), and US government bonds.

The DTC manages securities worth over $100 trillion and processes transactions totaling $3.7 quadrillion annually. With this approval, the company can now settle highly liquid assets on pre-approved Layer-1 and Layer-2 blockchains. The approval is valid for three years—ample time to test and scale the technology on a large scale.

The Italian Premiere: UniCredit Tokenizes Corporate Bond

While the United States is laying regulatory groundwork, European financial institutions are already demonstrating practical implementation. UniCredit and the Italian development bank Cassa Depositi e Prestiti (CDP) issued Italy’s first tokenized bond—over €5 million for the technology company E4 Computer Engineering.

What’s special: the bond is fully digitized and registered on a public blockchain. It has a six-year maturity and aims to finance the expansion of E4’s headquarters and a new data center. Goldman Sachs responded to this innovative move with a significant upward revision of its target price for UniCredit—by over 24 percent to €84.30 on December 4. The message from the investment bank is clear: blockchain innovation is valued with premiums in the markets.

Switzerland Under Pressure: Regulatory Realignment Needed

While Singapore, the US, and parts of Europe are aggressively modernizing their blockchain frameworks, Switzerland faces pressure to act. In October, the Federal Council presented its reform vision—with two new licensing categories: “Payment Institutions” and “Crypto Institutions.”

However, the Swiss Blockchain Federation and its industry colleagues demand more: they published a 12-point program to strengthen Switzerland’s position. The criticism focuses on the lack of a comprehensive strategic vision—while other countries see blockchain as an opportunity for financial competitiveness, Switzerland still appears too defensive.

Heinz Tännler, president of the SBF, emphasized: “The direction is right. The Federal Council shows that it takes the realities of the digital financial market seriously.” But there is still a big difference between “seriousness” and true market leadership.

What Does This Mean for the Financial Market?

The tokenization of securities could trigger several industry disruptions:

Liquidity and Access: Previously, access to certain classes of securities was limited by minimum investment amounts and geographic restrictions. Tokenization enables fractionalization and 24/7 global availability.

Programmable Assets: Smart Contracts can enable automated compliance, dynamic valuations, and intelligent execution.

Fee Reduction: Eliminating intermediaries—clearinghouses, custodians with high fee structures—can fundamentally lower transaction costs.

Market Entry of Fintech Players: Once the technical and regulatory infrastructure is in place, specialized blockchain fintech companies (like Advanced Blockchain with its expertise in digital financial systems) will be able to develop new applications and services.

Conclusion: The Transformation Starts Now

The SEC approval for the DTC is not just an administrative decision—it marks the point where blockchain technology transitions from experimental to operational reality in the financial market. JP Morgan, UniCredit, and other leading institutions are already demonstrating that the technology is mature for production environments.

The question for investors, financial institutions, and regulators is no longer “if,” but “how quickly” this integration will proceed. The next three years—the duration of the SEC approval—will be crucial for the scalability and practical viability of these new financial markets.