According to Woofun AI, Morgan Stanley (MS.US) has officially integrated into the tokenization service launched by the Depository Trust & Clearing Corporation (DTCC), becoming one of the first banks to convert U.S. equities and U.S. Treasuries into tokenized form since the service’s launch.
This move marks a significant step by traditional financial giants in integrating digital asset infrastructure, directly addressing a tokenizable asset universe with a combined market value of approximately $30 trillion. Morgan Stanley disclosed this strategic initiative on its official X platform account on the 4th, explicitly stating its intent to leverage the DTCC Tokenization Service (DTS) to tokenize U.S. equities and U.S. Treasury securities. This is not an isolated technological experiment, but a profound restructuring of existing market infrastructure, aimed at enhancing the processing capabilities of digital assets to meet evolving market demands.
The DTS service, officially launched on October 28 by DTC, a securities depository under DTCC, is designed to bridge the gap between traditional securities and blockchain. Its core purpose is to convert traditional securities held by DTC into blockchain-based tokens, with support for reverse conversion back to traditional securities when needed, creating a closed-loop system. It is important to note that this process does not issue new securities: the on-chain tokens represent ownership claims of securities already custodied by DTC, with securities identification codes, ownership rights, economic interests, and investor protections remaining unchanged, and official bookkeeping still maintained by DTC. Technically, DTS operates on the Canton Network and DTCC’s private network built on Besu technology, ensuring enterprise-grade security and compliance.
At launch, the service included 34 securities, such as large-cap U.S. stocks included in the Russell 1000 Index, ETFs tracking major indices, and U.S. Treasuries. According to a DTCC spokesperson speaking to CoinDesk, the combined market capitalization of these 34 securities is approximately $30 trillion. However, this figure reflects the scope of eligible securities, not the amount already tokenized; DTCC did not disclose the number of tokens minted or transactions processed on the first day.
Note that the tokenization conversion of securities must be conducted through DTC’s conversion service, which is available Monday through Friday, 2:00 PM to 6:00 PM Eastern Time, with a target processing time of under 15 minutes.
However, once securities are tokenized, they are no longer bound by traditional trading hours and can be transferred instantly at any time between digital wallets registered with DTC—though such transfers are limited to within the same blockchain; cross-chain transfers still require returning to DTC’s conversion service. This extension in time is a core advantage unavailable in traditional markets.
Woofun AI’s aggregated data shows that 20 financial institutions, including Morgan Stanley, JPMorgan (JPM.US), Bank of America (BAC.US), Citibank (C.US), Barclays (BCS.US), UBS (UBS.US), and Fidelity, have signed initial participation agreements for the service, with other institutions such as Citadel Securities also included. The service is exclusively available to DTC participants and is not accessible directly by retail investors.
This broad industry participation indicates that tokenized securities are moving from the proof-of-concept stage toward scalable adoption. Amy Aldenburger, Head of Digital Assets Strategy at Morgan Stanley, noted that gaining practical experience in integrating tokenized securities into existing market infrastructure helps the company continuously enhance its digital asset capabilities to adapt to evolving market conditions. Morgan Stanley anticipates that further improvements in capital efficiency could be achieved by simplifying the use of tokenized securities as collateral or enabling seamless transfers between financial institutions.
The legal basis for this service stems from a no-action letter issued by the SEC’s Division of Trading and Markets to DTC on December 11, 2025, stating that staff will not recommend enforcement action for three years, provided the arrangement proceeds as described by DTC. This is a time-limited staff-level exemption, not a permanent authorization. According to DTCC’s plan, Canton will be the only public network available on day one, with Stellar expected to join in 2027, followed by additional networks in the future.
Although the specific types and volumes of stocks and government bonds to be tokenized have not yet been disclosed, the strategic direction is clear. Previously, Morgan Stanley also announced plans to support trading of tokenized stocks in its proprietary alternative trading system (ATS) in the first quarter of 2027.
This strategy aims to simultaneously advance the issuance of tokenized securities on existing financial infrastructure and build the actual trading market, creating a full-cycle闭环 from issuance to trading. Through the DTS service, Morgan Stanley is not only exploring new technological pathways but also redefining the liquidity, collateral mobility, and capital efficiency of securities. This model, which combines the stability of traditional finance with the flexibility of blockchain technology, may become the dominant paradigm for future asset management. As more financial institutions join, the depth and breadth of the tokenized securities market are expected to expand further.