Morgan Stanley Begins Tokenizing U.S. Securities via DTCC Service
Written with artificial intelligence.
Morgan Stanley has started tokenizing U.S. equities and Treasuries using the DTCC Tokenization Service, which launched on October 28. This initiative includes participation from 20 major Wall Street firms, enabling the conversion of traditional securities into digital assets.
Morgan Stanley's Tokenization Initiative
Morgan Stanley has taken a significant step in integrating blockchain technology into traditional finance by tokenizing U.S. stocks and Treasuries. This move is facilitated through the newly launched DTCC Tokenization Service, which went live on October 28.
The service is operated by the Depository Trust Company (DTC), a subsidiary of the Depository Trust & Clearing Corporation, which serves as the post-trade backbone of U.S. markets, overseeing over $114 trillion in assets. According to Amy Oldenburg, Morgan Stanley's head of digital assets strategy, the experience gained from this integration will inform the bank's ongoing development in digital assets as the market evolves.
Key Features of the DTCC Tokenization Service
The DTCC Tokenization Service allows eligible firms to convert securities held at DTC into tokenized "digital twins" and back. These tokens maintain the same ownership rights, investor protections, and economic entitlements as the original securities. The service aims to facilitate quicker collateral movement and access to new liquidity pools within minutes. Currently, it operates on the Canton Network and the DTCC's private Besu network, with plans for additional blockchain integrations by 2027.
Participation and Regulatory Background
Morgan Stanley is among 20 participants in the DTC initiative, alongside notable firms like Bank of America, J.P. Morgan, and Fidelity Investments. The service was developed with input from over 150 firms, marking a collaborative effort to modernize securities trading. The regulatory groundwork began in December 2025 when the SEC issued a no-action letter, permitting DTC to tokenize stocks and Treasuries.
This development illustrates a contrasting approach to tokenization compared to crypto-native projects. For instance, major companies like Tesla and Amazon have opposed the trading of their shares on certain tokenized venues, highlighting ongoing concerns about regulatory compliance and market stability. As demand for tokenized assets grows, the market remains in its infancy, with volatility and liquidity issues still being addressed.