Morgan Stanley has started moving U.S. stocks and Treasuries onto blockchain rails—using Wall Street's own plumbing to do it—becoming one of the first banks to tokenize real-world assets through the DTCC Tokenization Service, which went live on Oct. 28.

The bank said Tuesday that it is among the first participants to convert U.S. equities and Treasuries into tokenized form via the service, which is operated by the Depository Trust Co. (DTC), a subsidiary of the Depository Trust & Clearing Corp. (DTCC). Morgan Stanley publicized the move in a statement on X, and DTCC detailed the launch in its own press release.

The DTC serves as the post-trade backbone of U.S. markets, holding more than $114 trillion in assets under custody. Through the new service, eligible firms can convert securities held at DTC into tokenized “digital twins”—and convert them back again—delivering the tokens to digital wallets of their choice. Because the underlying securities stay on DTC's books, the model runs tokenization through existing market plumbing rather than creating a parallel record of ownership.

According to DTCC, the tokens carry the same ownership rights, investor protections and economic entitlements as the underlying securities, and are designed to let firms move collateral and tap new pools of liquidity within minutes. By comparison, standard U.S. equity trades settle on the next business day. The service currently runs on the Canton Network and DTCC's private Besu network, with support for additional blockchains planned for 2027.

“The hands-on experience of integrating tokenized securities with established market infrastructure will inform the continued development of the firm's digital asset capabilities as the market evolves,” said Amy Oldenburg, Morgan Stanley's head of digital asset strategy.

Morgan Stanley is one of 20 DTC participants that have signed up so far, alongside Bank of America, Citi, J.P. Morgan, Fidelity Investments, Citadel Securities and UBS, among others. DTCC said it developed the service with input from more than 150 firms. The roster spans global banks, an asset manager and a market maker, and how quickly the other enrollees move into production—alongside whether the planned 2027 blockchain expansion stays on schedule—will be the near-term markers of adoption to watch.

The launch caps a regulatory path that began in December 2025, when the U.S. Securities and Exchange Commission issued DTC a no-action letter—a form of SEC staff relief signaling it does not intend to recommend enforcement action under the specified conditions—permitting it to tokenize Russell 1000 stocks, major index ETFs and U.S. Treasuries. DTCC has also worked with Chainlink on tokenized collateral management and laid out its plans for the service earlier this year as major Wall Street firms signed on.

The bank-led approach stands in contrast to crypto-native efforts to tokenize equities. Fifty-six companies—including Tesla, SpaceX, Amazon and Nvidia—have objected to having their shares traded on ICE TSV, a planned tokenized stock venue from OKX and NYSE owner Intercontinental Exchange. Under the SEC's innovation exemption, those objections bar the venue from listing third-party tokenized versions of their stock.

Demand for tokenized stocks is building, but the market remains young. The International Monetary Fund found last month that tokenized stocks trade mostly outside U.S. market hours, though they are still more volatile and less liquid than their traditional counterparts.

Source: Decrypt