Morgan Stanley said on Tuesday that it had created blockchain-based versions of U.S. stocks and Treasuries through a new service that went live on October 28. The offering, known as the DTCC Tokenization Service (DTS), is operated by the Depository Trust Company (DTC), a subsidiary of the Depository Trust & Clearing Corporation (DTCC), and aims to make securities easier to transfer within the regulated financial system. The bank announced the development in a post on X.

The launch does not mean U.S. stocks can now trade freely around the clock.

Digital twins that stay inside DTC's rules

Morgan Stanley says it is among the first banks to use DTS. According to the DTCC, around 20 banks are participating in the service, including Bank of America, Citi, J.P. Morgan, Fidelity and State Street.

DTS creates “digital twins” of instruments that are already registered at DTC, which is said to manage more than $114 trillion in securities. The tokens retain the ownership rights of the underlying instruments and preserve investor protections. Users can send the tokens to wallets approved for this purpose, or return them to their original registered state.

The service connects with Canton, an institutional blockchain with built-in privacy features, as well as a private DTCC network that runs on Besu, an Ethereum software client. Additional networks are set to launch in 2027.

A letter issued by SEC staff in December 2025 allows a pilot that will run for three years and covers Russell 1000 stocks (the large-cap U.S. equity index), major-index ETFs and Treasuries. Such staff letters grant relief rather than rewrite rules, so the pilot's asset scope and three-year term currently bound what banks can tokenize inside DTC's framework.

Big trading numbers, small share ownership

Onchain equity trading may look impressive at first glance, but the data tells a more modest story. Research published by Pantera in September found that total equity-perpetual trading volume reached $67.8 billion in June on the Hyperliquid and Lighter exchanges. Tokenized-equity spot trading, by comparison, amounted to no more than $4.2 billion.

The $67.8 billion figure needs context. Equity perpetuals allow traders to bet on stock prices without actually owning the underlying shares. With leverage and frequent trading, even a relatively small amount of capital can generate large trading volumes. The figure therefore reflects trading activity, not how much money investors have actually put into tokenized stocks.

Thin, volatile and mostly offshore

The ownership market is smaller still. The IMF's October report valued tokenized equities at $2.3 billion. It found thinner liquidity, greater volatility and more fragmented trading than traditional markets, although around-the-clock trading offers early signs of price discovery.

Data from Allium indicates that roughly 90% of tokenized-equity volume comes from outside the U.S. On Solana, 63% of tokenized-equity trading took place while U.S. exchanges were closed. The IMF says Ondo Finance and Backed Finance together account for more than 70% of tokenized-equity value. Measured against that offshore-heavy baseline, DTS and its roughly 20 participating banks represent the DTC-registered, onshore side of tokenized U.S. equities.

Collateral is the real prize, and issuers are wary

Collateral may offer a clearer payoff. A Nasdaq–ValueExchange survey of 203 participants found that 70% deal with settlement problems daily. It estimated that Tier 1 firms hold $36.8 billion in excess or non-earning collateral, and that freeing it up could generate $346 million in annual interest. For now, DTC assigns no collateral value to the pilot tokens in its own risk calculations.

Companies are also pushing back. The objections documented by CNBC have since grown. A November 3 filing from OKXICE, the proposed venture between OKX and NYSE parent Intercontinental Exchange, lists 59 issuers, including Microsoft, Alphabet and Goldman Sachs, objecting to third-party stock tokens on that venue.

Morgan Stanley itself remains cautious. Strategist Felix Stratmann said on October 29 that tokenized stocks were “not necessarily representing a more efficient state of the equity market yet.” He put the total value of tokenized real-world assets at $30–$40 billion at the time, but forecast growth to $2.3 trillion by 2030.

The nearer-term checkpoints are already fixed: new network connections arrive in 2027, the pilot is bounded by its three-year SEC window, and DTC assigns no collateral value to the tokens for now. The issuer objection list — 59 names at OKXICE alone — marks the other boundary around this first regulated phase of tokenized U.S. equities.