Morgan Stanley moves stocks and Treasuries onto DTCC rails

Morgan Stanley has begun tokenizing U.S. equities and Treasuries through the DTCC Tokenization Service, launched Oct. 28, as one of 20 participating firms.

The bank said Tuesday it was among the first banks to tokenize U.S. equities and Treasuries through it. The Depository Trust Co. operates it as a subsidiary of the Depository Trust & Clearing Corp.

DTC is the post-trade backbone of U.S. markets, with more than $114 trillion in assets under custody. The arrangement puts tokenized assets inside that established post-trade and custody structure rather than on a crypto-only venue.

How does the service turn securities into tokens?

Eligible firms can convert securities held at DTC into tokenized “digital twins” and back again, then deliver those tokens to digital wallets of their choice, DTCC said.

The tokens retain the same ownership rights, investor protections and economic entitlements as the originals, according to DTCC. The design lets firms move collateral and tap new pools of liquidity within minutes.

For participating firms, the operational change is the delivery mechanism: a selected wallet can receive a token carrying the same economic entitlements as a DTC-held security. The service is designed around two workflows—collateral movement and access to new liquidity pools—without altering the ownership rights or investor protections DTCC says the tokens retain.

Which infrastructure supports the service?

It currently runs on the Canton Network and DTCC’s private Besu network. DTCC plans to add more blockchains in 2027, widening the infrastructure options available to service participants.

“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.

Who has joined the service?

Twenty DTC participants have signed on so far, including Morgan Stanley and:

• Bank of America
• Citi
• J.P. Morgan
• Fidelity Investments
• Citadel Securities
• UBS

DTCC said it developed the service with input from more than 150 firms. That design group was broader than the 20-firm participant cohort.

What enabled the launch?

The launch followed a regulatory path that began in December 2025, when the U.S. Securities and Exchange Commission gave DTC a no-action letter. The letter allowed DTC to tokenize Russell 1000 stocks, major index ETFs and U.S. Treasuries.

The letter’s asset list covered the two product groups Morgan Stanley said it began moving onto the service: U.S. equities and Treasuries.

DTCC has also worked with Chainlink on tokenized collateral management. It laid out plans for the service earlier this year as major Wall Street firms signed on.

What differs from crypto-native stock venues?

The DTCC model contrasts with crypto-native efforts to tokenize stocks. Fifty-six companies have objected to having their shares traded on OKXICE TSV, a planned tokenized stock venue from OKX and Intercontinental Exchange, which owns the NYSE.

• Tesla
• SpaceX
• Amazon
• Nvidia

Under the SEC’s innovation exemption, those objections bar the venue from listing third-party tokenized versions of their stocks. For the 56 objecting companies, that means no third-party tokenized version of their stock can list there under the exemption.

What does early market data show?

The International Monetary Fund found last month that tokenized stocks trade mostly outside U.S. market hours. They also remain more volatile and less liquid than their traditional counterparts.

For institutions, those conditions limit how closely tokenized shares can mirror conventional U.S. trading sessions. The 20-firm DTCC cohort indicates early institutional demand, but the IMF findings show the wider market remains young.

The next disclosed market-structure change comes in 2027, when DTCC plans to add blockchains beyond the Canton Network and its private Besu network.