Wall Street’s Plumbing Goes Onchain as Morgan Stanley Tokenizes Securities
Morgan Stanley has begun moving U.S. stocks and Treasuries onto blockchain rails, using the DTCC Tokenization Service to convert these assets into digital form.
The service, which went live on October 28, is run by the Depository Trust Co., a subsidiary of the Depository Trust & Clearing Corp. The DTC is the post-trade backbone of U.S. markets, with more than $114 trillion in assets under custody.
Morgan Stanley is one of 20 DTC participants that have signed up so far, alongside Bank of America, Citi, J.P. Morgan, Fidelity Investments, Citadel Securities, and UBS, among others. DTCC said it developed the service with input from more than 150 firms.
The launch caps a regulatory path that began in December 2025, when the SEC gave DTC a no-action letter allowing it to tokenize Russell 1000 stocks, major index ETFs and U.S. Treasuries. DTCC has also worked with Chainlink on tokenized collateral management and laid out its plans for the service earlier this year as major Wall Street firms signed on.
Digital Twins and Market Infrastructure
The service lets eligible firms convert securities held at DTC into tokenized 'digital twins' and back again, delivering them to digital wallets of their choice. The tokens keep the same ownership rights, investor protections and economic entitlements as the originals, according to DTCC, and are designed to let firms move collateral and tap new pools of liquidity within minutes.
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.
The service currently runs on the Canton Network and DTCC’s private Besu network, with more blockchains planned for 2027.
Wall Street’s Approach vs. Crypto-Native Efforts
The bank-led approach contrasts with crypto-native efforts to tokenize stocks. Fifty-six companies, including Tesla, SpaceX, Amazon, and Nvidia, have objected to having their shares traded on OKXICE TSV, a planned tokenized stock venue from OKX and NYSE owner Intercontinental Exchange. Under the SEC’s innovation exemption, those objections bar the venue from listing third-party tokenized versions of their stock.
Demand is building, but the market is still young. The International Monetary Fund found last month that tokenized stocks trade mostly outside U.S. market hours, though they remain more volatile and less liquid than their traditional counterparts.
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