Morgan Stanley has begun creating tokenized versions of U.S. equities and Treasury securities using the Depository Trust & Clearing Corporation’s Tokenization Service. The move places the firm among the initial group of banks participating after the platform entered live production on October 28, 2026.

The service, operated by DTCC’s Depository Trust Company subsidiary, enables approved institutions to generate blockchain representations of securities already held in DTC custody. These digital versions carry identical ownership rights, investor protections and economic entitlements to their traditional counterparts. Institutions can convert holdings between conventional and tokenized forms and transfer the tokens to supported digital wallets.

Service Scope and Supporting Infrastructure

DTC holds more than $114 trillion in assets under custody. The Tokenization Service currently covers eligible U.S. stocks, exchange-traded funds and Treasury securities. Regulatory clearance arrived through an SEC no-action letter issued in December 2025 that addressed Russell 1000 constituents, index-tracking ETFs and U.S. Treasuries.

At launch the platform operates on the Canton Network and DTCC’s private Besu blockchain. Additional network integrations are scheduled for 2027. Development involved input from a working group of more than 150 firms. Limited production activity in July included securities lending, collateral movements and Treasury repurchase agreements.

Twenty DTC participants signed access agreements for the initial rollout. Named institutions include Morgan Stanley, JPMorgan, Citi, Bank of America, Barclays, UBS, State Street, Fidelity Investments and BNP Paribas. Further participants are expected to join on a rolling basis.

Broader Institutional Context

DTCC designed the service to support greater asset liquidity, more efficient collateral transfers and improved capital efficiency. Tokenized securities remain fully backed one-to-one by the underlying holdings at DTC.

Morgan Stanley’s participation is distinct from a separate initiative under development at the bank. The firm plans to enable trading of tokenized equities on its alternative trading system beginning in the first quarter of 2027. In September it established a Digital Asset Lab to examine stablecoins, tokenized deposits, money-market funds and related applications without introducing experimental systems into core operations. The bank is also building digital wallet infrastructure for client holdings of tokenized securities.

In earlier comments, Oldenburg estimated the broader market for tokenized real-world assets could reach between $3 trillion and $10 trillion by 2030, citing private shares, structured notes and investment funds as potential areas of growth. She noted that institutional demand has so far been constrained by the limited availability of suitable products.

Market Infrastructure Developments

Other major market operators are advancing parallel efforts. On November 2 the New York Stock Exchange named additional transfer-agent partners for a proposed blockchain-based trading venue intended to support continuous trading, immediate settlement and stablecoin funding while preserving conventional shareholder rights. That platform remains subject to regulatory approval and has no announced launch date.

The DTCC Tokenization Service provides a regulated pathway for converting traditional securities into digital form without altering their legal or economic characteristics. Early adoption by large custodians and banks marks a practical step in connecting established market infrastructure with blockchain networks.