Morgan Stanley Bets on Tokenization and Begins Trading US Stocks and Treasury Bonds on Blockchain

The American bank Morgan Stanley has taken a new step in the digital asset market by starting to tokenize stocks and US Treasury bonds, using the infrastructure developed by the Depository Trust & Clearing Corporation (DTCC). This initiative positions the institution among the first financial entities to use this technology to integrate traditional instruments with blockchain networks.

The operation was carried out through DTCC's new tokenization service, which began operating on October 28 and allows the conversion of real-world financial assets, known as Real World Assets (RWA), into digital representations that can be transferred via blockchain.

This advancement is part of a broader strategy by Morgan Stanley to incorporate digital assets into its business. In fact, the bank plans to enable trading of tokenized stocks on its alternative trading system during the first quarter of 2027, although it initially set that goal for the second half of 2026.

Amy Oldenburg, head of digital asset strategy at Morgan Stanley, explained that the experience will allow for the evaluation of the integration of tokenized instruments with traditional financial systems and guide the entity's upcoming technological developments.

Morgan Stanley Advances with Financial Asset Tokenization

Tokenization involves creating a digital representation of a traditional asset, such as a stock, bond, or financial instrument, using blockchain technology. This mechanism allows assets to be transferred through digital networks and opens the possibility of trading outside conventional financial market hours, although effective trading depends on the applicable platforms and regulations.

In the case of Morgan Stanley, the initiative utilizes DTCC's infrastructure, one of the main organizations responsible for clearing, settlement, and custody services for securities in the United States.

Its depository subsidiary, Depository Trust Company (DTC), holds over $114 trillion in assets under custody and developed a system that allows for the issuance of digital representations of traditional securities while preserving the economic and ownership rights associated with the original instruments.

According to DTCC, authorized users can convert assets between their traditional and tokenized versions, as well as transfer digital representations to compatible wallets.

The entity claims that this technology could help improve liquidity, facilitate the use of assets as financial collateral, and allow for more efficient capital management.
Tokenization involves creating a digital representation of a traditional asset, such as a stock, bond, or financial instrument, using blockchain technology.

JPMorgan, Citi, and Bank of America Also Participate in the Project

Morgan Stanley is not the only bank interested in this transformation of the financial market. The new DTCC infrastructure began operating with 20 institutions that signed agreements to access the service, including JPMorgan, Bank of America, Barclays, BNP Paribas, Citi, Fidelity Investments, State Street, and UBS.

The platform was developed with the collaboration of over 150 companies from the financial and technology sectors, aiming to facilitate the connection between traditional markets and blockchain-based systems.

Currently, the service operates on two networks: Canton Network and a private DTCC network based on Besu. The organization plans to incorporate new blockchains during 2027 to expand the system's interoperability.

The launch also has regulatory backing. In December 2025, the US Securities and Exchange Commission (SEC) issued a no-action letter that allowed the project to proceed under certain conditions.

Among the instruments included are stocks of companies that make up the Russell 1000 index, exchange-traded funds (ETFs) linked to major US stock indices, and Treasury bonds.

What Morgan Stanley Plans for 2027

In addition to participating in DTCC's infrastructure, Morgan Stanley is working on developing its own capabilities to trade tokenized assets. The entity expects to incorporate tokenized stocks into its alternative trading system, known as Alternative Trading System (ATS), during the first quarter of 2027.

This type of platform allows for trades between buyers and sellers outside traditional exchanges, such as the New York Stock Exchange or Nasdaq, within the US regulatory framework.

The launch was initially scheduled for the second half of 2026 but has been postponed as the bank continues to develop the necessary technology.

In statements to The Block, Oldenburg explained that the entity still needs to expand its infrastructure and that institutional demand remains conditioned by the availability of tokenized financial products.

The executive also projected that the global market for tokenized assets could reach between $3 trillion and $10 trillion by 2030, an estimate that reflects growth expectations for the sector, although it does not constitute a guarantee regarding its evolution.

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