Morgan Stanley uses DTCC tokenization service for U.S. assets

Twenty firms have signed up so far for the Depository Trust & Clearing Corporation’s Tokenization Service, or DTS, according to DTCC. The service launched Oct. 28 to create blockchain-based versions of U.S. stocks and Treasuries.

One of them is Morgan Stanley, alongside J.P. Morgan, Citi, Bank of America, Fidelity and Citadel Securities. The bank said in a post on X that it began tokenizing after DTS went live, describing itself as among the first banks to use the system.

DTCC clears and settles most U.S. stock and bond trades. Its depository subsidiary, The Depository Trust Company (DTC), holds the securities that DTS turns into blockchain-based representations. That structure matters because tokenization does not detach the digital representation from the underlying U.S. market. The blockchain token is an additional form, while DTC remains the holder of the conventional security and the service sits inside DTCC’s established infrastructure.

How does DTS work?

Amy Oldenburg, Morgan Stanley’s head of digital assets strategy, said: “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.” Her comment ties the bank’s hands-on use of DTS to what it develops next.

Under DTS, DTC mints tokens for securities it already holds. The arrangement has four core features:

• The tokens carry the same ownership rights and investor protections as the originals.
• Users can exchange between the conventional security and its tokenized form.
• Users can send tokens to their own digital wallets.
• A tokenized security can trade freely on a blockchain 24/7.

The service runs on two blockchains:

• Canton.
• DTCC’s private Besu network.

DTCC plans to add more blockchains in 2027.

The Securities and Exchange Commission cleared the project in a December 2025 no-action letter. Its scope includes:

• Russell 1000 stocks.
• Exchange-traded funds that track major indexes.
• U.S. Treasuries.

What does this change for traders and banks?

DTCC says tokenization can improve liquidity, simplify collateral transfers and make capital use more efficient. Those benefits depend on tokens remaining linked to securities held by DTC, with the same ownership rights and investor protections as the originals.

For traders, the immediate change is another form in which eligible securities can be held or transferred. Users can move from the conventional security to its token, place the token in their own digital wallet and trade the blockchain form 24/7. The original remains in DTC’s custody.

For banks and market operators, DTS links blockchain activity to established custody, clearing and settlement infrastructure. Tokenized collateral can move through digital rails, while its blockchain form remains available for trading around the clock. The same ownership rights and investor protections travel with the token, according to DTCC.

The 20 sign-ups give DTS an initial multi-firm base. Morgan Stanley’s X post did not announce a wider rollout schedule, and CoinDesk said it reached out to the bank for comment but did not receive a response at the time of writing.

A related market outlook cited alongside the announcement put diversified real-world-asset stablecoin yields at 5% to 7% from real credit, compared with crypto funding compressed to roughly 4%. It said GENIUS pushes yield off-chain and projected a $4 billion total addressable market within three years. Those figures describe the wider stablecoin and tokenized-finance market rather than DTS operating results.

DTCC’s next scheduled market-structure change comes in 2027, when the company plans to add more blockchains to DTS.