Market infrastructure firms warn tokenized securities face higher costs, split liquidity without interoperability

The world's largest market infrastructure operators, including the Depository Trust and Clearing Corporation (DTCC), Euroclear, and Clearstream, have issued a warning that the widespread adoption of tokenized securities hinges on establishing interoperability between blockchain networks and traditional finance systems. In a joint white paper developed with Boston Consulting Group, they emphasize that "interoperability is a prerequisite for digital asset security (DAS) adoption at scale." Without it, assets risk becoming isolated on different networks, leading to high operational costs and fragmented liquidity as trading volumes increase.

The Interoperability Challenge

The paper highlights that the current landscape of dozens of blockchains, each with its own standards, smart contract logic, and settlement designs, makes integration difficult and introduces operational and regulatory risks. The operators do not endorse a single technology but instead advocate for a "network-of-networks" model. This model relies on standards, gateways, and regulated service providers to connect digital and traditional systems, ensuring that assets can move across platforms while maintaining their integrity, ownership rights, and lifecycle, all while adhering to legal and regulatory compliance. The core principle they advocate for is "same asset, same rights, same outcome."

Current Market Context and Future Vision

This warning comes amid growing traction for tokenization in repo markets and pilot programs across the U.S. and Europe. While tokenized securities represent a small fraction of global equity and FX markets, the paper notes that significant infrastructure is already in place, supporting over $300 billion in daily repo activity. Many existing workflows still rely on legacy systems, with tokenized bonds often trading on-chain while cash settles through traditional real-time gross settlement systems or bank payment networks. The paper anticipates this coexistence of old and new systems will continue for years.

The proposed framework extends beyond technical connections, aiming for alignment across asset and liability recognition, ownership, lifecycle events, ledger finality, and legal enforceability. Achieving this alignment is crucial to avoid extra reconciliation steps that could negate the promised efficiency gains of tokenized assets. The group urges regulators and market participants to form working groups focused on governance, standards, and resilience to shape future markets.

Major Wall Street firms have expressed optimism about tokenization's potential to reshape financial markets through 24/7 trading, faster settlement, and more efficient collateral use, potentially reducing back-office costs and freeing up capital. The white paper supports this vision, suggesting that success depends more on aligning the rules governing these systems than on launching new blockchains.