Morgan Stanley Begins Tokenizing Stocks and Treasuries via DTCC Infrastructure

Morgan Stanley has begun converting traditional U.S. equities and Treasuries into onchain assets using the Depository Trust Co.'s newly launched tokenization platform ¹. The investment bank announced on Tuesday that it is among the initial cohort deploying capital through the DTCC Tokenization Service, which went live on Oct. 28 ¹. The Depository Trust & Clearing Corp. subsidiary acts as the central clearing and settlement backbone for U.S. markets, holding more than $114 trillion in assets under custody ¹.

The infrastructure enables participating institutions to convert securities custodied at the DTC into tokenized "digital twins" and redeem them back into standard book-entry form ¹. The DTCC stated that these tokens retain the identical ownership rights, economic benefits, and investor protections of the underlying assets while allowing institutions to transfer collateral and access liquidity pools in minutes ¹. Settlements currently operate across the Canton Network and the DTCC's private Besu blockchain network, with support for additional networks scheduled for 2027 ¹.

Institutional Adoption vs. Exchange Initiatives

Morgan Stanley is one of 20 DTC members participating in the deployment ¹. The initial group includes Bank of America, Citi, J.P. Morgan, Fidelity Investments, Citadel Securities, and UBS, developed following consultations with over 150 industry firms ¹. The program follows regulatory clearance granted in December 2025, when the Securities and Exchange Commission issued a no-action letter authorizing the DTC to tokenize Russell 1000 equities, major index exchange-traded funds, and U.S. Treasuries ¹. Amy Oldenburg, head of digital assets strategy at Morgan Stanley, stated that integrating tokenized assets with established market infrastructure will guide the firm's ongoing digital asset strategy ¹.

This custodian-backed rollout contrasts with external exchange efforts to trade synthetic or secondary equity tokens ¹. While competitors have pursued retail-facing venues—such as initiatives seen when Blockchain.com and NYSE partnered on tokenized securities—commercial friction remains ¹. Fifty-six major corporations, including Amazon, Nvidia, Tesla, and SpaceX, filed formal objections against having their equity traded on the proposed OKXICE TSV venue, triggering an SEC innovation exemption rule that blocks unauthorized third-party listings ¹. Additionally, an International Monetary Fund study released last month noted that while tokenized equities see notable activity outside standard U.S. trading hours, they still suffer from higher volatility and thinner liquidity than traditional secondary markets ¹.