Morgan Stanley has officially brought US stocks and government bonds on-chain. The investment bank is leveraging the DTCC Tokenization Service, which went live on October 28, 2026. The service is managed by Depository Trust Co. (DTC), a subsidiary of Depository Trust & Clearing Corp. that holds custody of over $114 trillion in US financial market assets.
A total of 20 leading Wall Street financial institutions immediately joined as early participants. Names like Bank of America, Citi, J.P. Morgan, Fidelity Investments, Citadel Securities, and UBS have joined the initiative alongside Morgan Stanley. The involvement of these major institutions marks a pivotal shift, bringing asset tokenization directly from the clearing and custody core of US capital markets.
How Stocks Transform into Digital Twins
Through DTC’s new system, registered financial institutions can convert conventional securities into digital twins in their digital wallet of choice. This on-chain format preserves ownership rights, investor protections, and economic rights identical to the original assets in traditional capital markets.
In December 2025, the US Securities and Exchange Commission (SEC) issued a no-action letter that serves as the legal foundation for this initiative. The regulatory relief allows DTC to tokenize constituent stocks of the Russell 1000 index, major index exchange-traded funds (ETFs), and US Treasuries. The SEC’s green light opens a formal path for banks to transition traditional capital market instruments to a distributed ledger environment.
Dedicated Tracks Ahead of 2027 Public Networks
The DTCC Tokenization Service infrastructure was not designed unilaterally. Its development incorporated input and testing from more than 150 financial firms before the system officially rolled out to financial markets.
Currently, the tokenization system operates on Canton Network and DTCC’s private Besu network. Integration with additional public blockchain networks is planned to begin in 2027.
A Sharp Contrast to Crypto-Native Platforms
Wall Street’s move stands in stark contrast to stock tokenization efforts in the crypto-native sector. On the OKXICE TSV platform, 56 major corporations including Tesla, SpaceX, Amazon, and Nvidia had previously blocked listings of their shares.
Data from the International Monetary Fund (IMF) last month showed that tokenized stock transaction volumes were dominated by activity outside regular US trading hours. Nonetheless, the IMF report highlighted that liquidity in tokenized markets remains thinner compared to traditional markets.
For market participants, the arrival of digital twins opens access to after-hours trading while maintaining intact ownership protections. The most immediate challenge remains liquidity, which according to the IMF’s findings is still thinner than in traditional markets.
Reported via Decrypt.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
