Morgan Stanley, the major U.S. investment bank, announced on November 3 (U.S. time) that it has tokenized U.S. equities and U.S. Treasuries. The move uses the DTCC Tokenization Service (DTS), a securities tokenization offering provided by the Depository Trust & Clearing Corporation (DTCC), the U.S. securities settlement and clearing organization. Morgan Stanley is one of the initial participating banks that signed on to use the service from its launch.
DTS was launched on October 28 by the Depository Trust Company (DTC), the securities depository and transfer institution under DTCC. The system represents rights to securities held in custody at DTC as digital tokens on a blockchain, allowing conversion back and forth between conventional and tokenized forms. According to DTCC, the service supports tokenization of 34 securities at launch, and tokenized securities are backed one-to-one by securities held in custody at DTC. Ownership rights, economic rights, and investor protections attached to the underlying securities are maintained after tokenization, the organization said.
Eligible DTC participants can transfer tokenized securities between digital wallets registered with DTC 24 hours a day, 365 days a year, as long as the transfer occurs on the same blockchain. Eligible assets include constituents of the Russell 1000 Index, exchange-traded funds (ETFs) tracking major stock indexes, and U.S. Treasuries. Supported networks are the Canton Network, a blockchain for financial institutions, and DTCC's private network using the Ethereum client Besu, with plans to expand supported destinations in 2027.
Morgan Stanley did not disclose the specific securities or quantities tokenized, or the blockchain used. The bank is separately pursuing plans to support trading of tokenized equities on its own alternative trading system (ATS). The launch target has been pushed back from the originally planned second half of 2026 to the first quarter of 2027, as the bank continues to build out the necessary infrastructure.
Note: Based on DTCC published materials and Morgan Stanley's announcement.
On the regulatory front, the U.S. Securities and Exchange Commission (SEC) issued a no-action letter in December 2025 permitting the business under certain conditions. Tokenized securities are drawing growing interest from major financial institutions as a way to speed up settlement and ease constraints on trading hours, and the focus is on whether DTCC's platform will become the industry-standard venue.
Market participants say tokenization could lower securities transfer and settlement costs and improve liquidity, while challenges remain in connecting with existing clearing and custody infrastructure and clarifying the legal status of tokenized assets. Morgan Stanley's move is seen as a case of a major bank engaging with tokenized assets at the operational level, and could prompt other financial institutions to follow suit.
