Morgan Stanley said it is among the first banks to tokenize U.S. equities and Treasuries through the DTCC Tokenization Service, which launched on Oct. 28. The service is operated by the Depository Trust Co. (DTC), a subsidiary of the Depository Trust & Clearing Corp., the post-trade backbone of U.S. markets with more than $114 trillion in assets under custody.
The bank said Tuesday that it has started converting U.S. stocks and Treasuries into tokenized form using the service. The move places Morgan Stanley among 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.
How the service works
The DTCC Tokenization Service lets eligible firms convert securities held at DTC into tokenized “digital twins” and back again, delivering them to digital wallets of their choice. According to DTCC, the tokens retain the same ownership rights, investor protections, and economic entitlements as the originals, and are designed to let firms move collateral and tap new pools of liquidity within minutes.
The service currently runs on the Canton Network and DTCC’s private Besu network, with more 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 assets strategy.
Regulatory path
The launch follows a regulatory process that began in December 2025, when the U.S. Securities and Exchange Commission gave DTC a no-action letter allowing it to tokenize Russell 1000 stocks, major index ETFs, and U.S. Treasuries. DTCC has also worked with Chainlink on tokenized collateral management and outlined its plans for the service earlier this year as major Wall Street firms signed on.
The bank-led approach contrasts with crypto-native efforts to tokenize stocks. Fifty-six companies, including Tesla, SpaceX, Amazon, and Nvidia, have objected to having their shares traded on OKXICE 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.
Market still young
Demand 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 remain more volatile and less liquid than their traditional counterparts.
