The Crossover
The Machinery · Episode 3 of 6
This is Viv's Notebook.
Who actually settles a trade
Buying a share takes milliseconds and settling it takes a day. The company that does the settling has started running trades on tokens.
5 min watch · Blockchain & Technology · Always free
In America, the job of moving the share to you, moving the money to the seller and making sure both happen, or neither does, belongs to one company most people have never heard of, the Depository Trust and Clearing Corporation. In 2025 its subsidiaries processed $4.7 quadrillion of securities transactions.
This entry follows how the DTCC does that job, how the settlement cycle shrank from 5 days to 1, and what changed when it started running real trades with tokens. It closes on a question that matters once the rules about a security live in software.
For education only, not financial advice. Crypto assets are volatile and you can lose all the money you invest.
Transcriptlightly edited
What happens after you buy a share
So, who actually settles a trade?
When you buy a share, the trade happens in milliseconds, but the settlement takes a day. That gap is where a company most people have never heard of does its work. It’s called the Depository Trust and Clearing Corporation, or the DTCC. In 2025, its subsidiaries processed $4.7 quadrillion of security transactions. Its depository held $114 trillion of securities from more than 150 countries.
Three jobs, all at the DTCC
Settlement is a simple thing that nobody thinks about. You and a seller agree a price, and that’s the part you see. Then somebody has to move the share to you, move the money to the seller, and make sure both halves happen, or neither does.
In America, that job splits 3 ways, and all 3 are the DTCC. First, the National Securities Clearing Corporation works out who owes what. It nets the trade of each against each other, so about 98% of the payments cancel out before any money moves.
Take a real day. On March 3rd, 2020, $3.5 trillion of shares went through that system. After netting, the money that actually had to change hands was just over $80 billion.
Second, the Depository Trust Company moves what’s left. It holds the securities and changes who owns them on its own records, so nothing physical moves anywhere. And third, the Fixed Income Clearing Corporation does both of those jobs for US Treasuries and mortgage bonds.
From 5 days to 1, and then tokens
The settlement cycle has been shrinking for 30 years. It took 5 days until 1995, 3 days until 2017, 2 days until 2024, and since May 28th, 2024, it’s been 1 day. They call it T plus 1.
And now the DTCC is trying to take the gap out altogether. On July 15th, 2026, the DTCC said it had turned securities it already holds into tokens. Then it ran real trades with them in its live system rather than in a test sandbox. Over a few hours it ran collateral pledges, securities lending, and Treasuries and repo trades. It also ran equity trades and the margin process at a central clearing house. More than 30 firms took part, including BlackRock, Goldman Sachs, J.P. Morgan, Vanguard and the New York Stock Exchange.
It could do that because in December ’25 the SEC gave it a no-action letter. That’s the SEC staff saying in writing they won’t take action against it. The DTCC’s letter runs for 3 years. It covers the stocks in the Russell 1000, ETF tracking the major indices, and US Treasury bills, bonds and notes. The full service was due to launch in October ’26.
Why instant settlement costs more
The prize here is called atomic settlement. The share and the money move together, or neither moves. That means there’s no gap where one side has paid and the other hasn’t, and in principle no need for a clearing house sitting in the middle at all.
But there’s a cost to it. The Bank of International Settlements, the bank central banks use, looked at exactly this in a report for the G20 in 2024. It found that instant settlement needs more money on hand than a system that nets, and that managing the money gets more complex.
Remember that 98%. Netting works precisely because it waits. If every trade settles on its own the moment it’s agreed, the netting goes, and every firm has to fund every trade in full. That’s why the DTCC is working on moving collateral around faster, and leaving the netting in place.
Who writes the software
So the DTCC is starting to rebuild the plumbing under American shares on the technology crypto has used for years. That’s happening whether or not crypto prices do anything this year, and I think it tells us more about where finance is heading than any price chart.
And once the rules about a security live in software, somebody writes that software. So the question I keep coming back to is who that somebody is, and who’s allowed to change it.
Closing
We discuss this and more on The Crossover, and it comes out free every weekday, in plain English, at thecrossover.io.
Supporting notesdrawn from the transcript
Settlement splits three ways in America, and all three are the DTCC. The National Securities Clearing Corporation nets trades against each other, so about 98% of payments cancel out before any money moves. On March 3rd, 2020, $3.5 trillion of shares went through it, and just over $80 billion actually had to change hands. The Depository Trust Company changes who owns what on its own records, and the Fixed Income Clearing Corporation does both jobs for US Treasuries and mortgage bonds. On July 15th, 2026, the DTCC said it had turned securities it already holds into tokens and run real trades with them in its live system, with more than 30 firms taking part, under a three-year SEC no-action letter from December 2025.
The prize is atomic settlement, where the share and the money move together or neither moves, with no gap and in principle no need for a clearing house in the middle. The cost, found in a 2024 report for the G20 by the bank central banks use, is that instant settlement needs more money on hand than a system that nets. Netting works because it waits, so if every trade settled on its own, every firm would have to fund every trade in full. That's why the DTCC is working on moving collateral faster and leaving the netting in place. Once the rules about a security live in software, somebody writes that software, and the question the entry ends on is who that somebody is, and who's allowed to change it.
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This entry ends on who writes the software once a security's rules live in code, and who's allowed to change it. If you have a view on who that should be, say so below. The questions that come back here are where a lot of these entries start.
