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Morgan Stanley joins Wall Street asset tokenization initiative
U.S. investment bank Morgan Stanley has become one of the first participants in a new Wall Street securities tokenization system. The platform enables the issuance of digital versions of U.S. stocks and government bonds that can be traded using blockchain technology.
The bank began working with tokenized securities following the launch of the Depository Trust & Clearing Corporation (DTCC) Tokenization Service (DTS). The platform went live on October 28 and is designed to bring traditional financial instruments into digital form.
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DTCC is a key operator of U.S. financial market infrastructure, providing clearing and settlement services for most stock and bond transactions in the country.
Amy Oldenburg, Head of Digital Assets Strategy at Morgan Stanley, said that participating in the project will give the bank hands-on experience integrating tokenized securities with existing financial infrastructure. According to her, this experience will help guide the further development of the company's digital asset capabilities.
How the new tokenization system works
Tokenization involves creating digital representations of traditional securities that can be transferred and traded using blockchain technology. This technology could potentially enable round-the-clock asset transfers without the restrictions of traditional stock exchange trading hours.
Under DTS, DTCC's subsidiary, Depository Trust Company, issues tokens backed by securities already held in its custody. Tokenized assets retain the same ownership rights and investor protections as the original instruments.
Participants can convert traditional securities into their digital equivalents and back, as well as transfer tokens to their own digital wallets. According to DTCC, the system is expected to improve market liquidity, simplify the use of assets as collateral, and make capital management more efficient.
Initially, the service operates on two blockchains: Canton and DTCC's private Besu-based network. Additional blockchain networks are expected to be integrated in 2027.
The project received regulatory clearance from the U.S. Securities and Exchange Commission (SEC) in December 2025 through a no-action letter. The system covers stocks included in the Russell 1000 index, exchange-traded funds (ETFs) tracking major stock indexes, and U.S. Treasury securities.
Wall Street giants embrace blockchain technology
A total of 20 financial institutions have already joined DTS. Alongside Morgan Stanley, participants include major U.S. banks J.P. Morgan, Citi, and Bank of America, investment firm Fidelity, and market maker Citadel Securities.
For market participants, tokenization offers a way to conduct transactions involving traditional financial assets on blockchain networks without changing investors' underlying rights. The initiative does not involve issuing new stocks or bonds but rather creating digital versions of existing financial instruments.
The launch of DTS demonstrates how blockchain technology is gradually becoming part of traditional financial market infrastructure. However, the broader adoption of tokenized assets will depend on demand from market participants, interoperability between different blockchains, and the evolution of regulatory requirements.
As a reminder, Morgan Stanley plans to give AI agents access to its wealth management platform.
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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