Morgan Stanley tokenizes US stocks and Treasuries inside Wall Street's settlement system

Morgan Stanley (NYSE: MS) said in a post on X that it is among the first banks to tokenize US equities and US Treasuries through the DTCC Tokenization Service, which the Depository Trust Company launched on October 28. Twenty DTC participants have signed agreements to use it.

What the service converts, and into what

The Depository Trust Company (DTC) is a subsidiary of the Depository Trust & Clearing Corporation (DTCC), the post-trade infrastructure that holds securities for US brokers and banks. DTCC said DTC has more than $114 trillion in assets under custody.

Under the new service, eligible users can convert securities held at DTC into tokenized versions and back again, and deliver them to digital wallets of their choice, DTCC said in its launch announcement. It described the tokenized versions as "digital twins" that retain the ownership rights, investor protections and economic entitlements of the traditional securities.

DTCC said the service is integrated with the Canton Network and DTCC's private Besu network, and that more blockchain networks are to be added in 2027.

Morgan Stanley's statement and the list of 20 firms

In a post on its official X account, Morgan Stanley said it is "among the first banks to tokenize real-world assets following the launch of the DTCC Tokenization Service (DTS), converting U.S. Equity and U.S. Treasuries to tokenized form."

Morgan Stanley is one of 20 DTC participants that DTCC listed as having signed agreements to access the service. The others named are Alpaca, Apex Clearing Corporation, Barclays, Bank of America, BNP Paribas, Brown Brothers Harriman, Citadel Securities, Citi, Clear Street, DriveWealth, Edward Jones, Fidelity Investments, Interchange Clearing, J.P. Morgan, Marex, Mirae Asset Securities (USA), State Street, UBS and Velocity Capital. DTCC said further users will be onboarded on a rolling basis.

DTCC said it developed the service with input from more than 150 firms in an industry working group. The Morgan Stanley announcement was also reported by Decrypt.

A December 2025 permission, then limited trades

The service rests on a no-action letter from the US Securities and Exchange Commission that DTC received in December 2025. According to DTCC, the letter authorized DTC to tokenize Russell 1000 constituents, exchange-traded funds tracking major indices and US Treasury securities. About seven months later, DTCC said, the company completed initial limited-production trades and multiple on-chain transactions.

DTCC's chief executive, Frank La Salla, said in the announcement: "Today marks the culmination of years of work to bring tokenized securities into a regulated framework supported by trusted market infrastructure."

Open questions in the announcements

DTCC's announcement does not say how many securities have been tokenized so far, what volume has moved on the networks, or when tokenized positions will be used as collateral in practice. DTCC described the stated aim as letting investors "move assets more efficiently, access new liquidity pools and mobilize collateral within minutes."

Infrastructure first, trading later

We think the more important fact in this story is where the tokenization happens: inside the existing custody system, with the same legal rights as the original security, not on a separate crypto venue. That puts the experiment where regulators and banks are most comfortable, and we expect it to move at the pace of operational testing if the first months look like the limited-production phase.

The opportunity is faster collateral movement and settlement for institutions if volumes grow. The threat is fragmentation: two networks today, more in 2027, and no figures yet on use. We do not forecast token prices and this story does not bear on them. We would look for DTCC volume data and for the first participant to describe a live collateral use, and our view would change if the service stays limited to test-size conversions.

The view in this final section is FinanceInTime's editorial opinion, for information only. It is not investment, tax, legal or other advice, and it does not take your circumstances into account. Forecasts are uncertain and past results do not guarantee future ones.