According to Woofun AI, Morgan Stanley (MS.US) officially joined the tokenized service project launched by the American Depository and Settlement Corporation (DTCC), becoming one of the first banks to convert US stocks and US Treasury bonds into tokenized form after the service was launched.
This move marks a substantial step in the integration of digital asset infrastructure by traditional financial giants, directly touching the range of tokenable assets with a total market capitalization of around $30 trillion. Morgan Stanley revealed this strategic move through the X platform's official account on the 4th, making it clear that DTCC's Tokenization Service (DTCC Tokenization Service, DTS for short) will be used to handle the tokenization process for US stocks and US Treasury bonds. This move is not an isolated technical experiment, but rather a deep restructuring of the existing market infrastructure. It aims to improve the processing capacity of digital assets through technical means to meet the changing needs of the market.
The DTS service was officially launched by DTC, a securities depository under DTCC, on October 28. Its core logic is to break the barriers between traditional securities and blockchain. The original design of the service was to convert traditional securities stored in DTC into tokens on the blockchain and support reverse conversion back to traditional securities forms when necessary, thus forming a closed loop. It should be clarified that this process does not issue new securities: the on-chain token is an equity mapping of DTC's escrow securities. The securities identification code, ownership, financial rights, and investor protection remain unchanged, and the official bookkeeping remains in DTC. In terms of technical architecture, DTS operates on Canton Network and DTCC's private network built on Besu technology, ensuring the security and compliance of enterprise-level applications.
In terms of asset coverage, the service initially included 34 types of securities, including some large US stocks included in the Russell 1000 Index, ETFs that track major indices, and US Treasury bonds. According to a DTCC spokesperson's explanation to CoinDesk, the total market capitalization of these 34 securities is around $30 trillion. However, this figure is the scope of qualifying securities, not the scale already on the chain. DTCC did not disclose the amount minted and the number of transfers on the first day.
It is worth noting that the tokenized conversion of securities must be carried out through the DTC conversion service. The opening hours are 2:00 to 18:00 EST on weekdays, and the target processing time is within 15 minutes.
However, once the securities are tokenized, they are free from the constraints of traditional transaction time and can be transferred 24 hours a day between digital wallets registered at DTC, but this transmission is limited to the same blockchain, and cross-chain transfers still have to return to DTC's conversion service. This scalability in the time dimension is a core advantage that traditional markets cannot provide.
According to data compiled by Woofun AI, 20 financial institutions including Morgan Stanley, JP Morgan (JPM.US), Bank of America (BAC.US), Citibank (C.US), Barclays Bank (BCS.US), UBS (UBS.US), and Fidelity have signed initial participation agreements for the service, as well as institutions such as Citadel Securities. The service is only open to DTC participants and retail customers cannot directly access it.
This broad industry participation shows that tokenized securities are moving from the proof-of-concept stage to large-scale application. Amy Oldenburg, head of digital asset strategy at Morgan Stanley, pointed out that the practical experience of integrating tokenized securities into the existing market infrastructure helps the company continue to improve its digital asset processing capabilities to adapt to the development and changes of the market. Morgan Stanley anticipates that simplifying the process of using tokenized securities as collateral or enabling convenient transfers between financial institutions will further improve the efficiency of fund operations.
The legal basis for this service comes from the U.S. Securities and Exchange Commission (SEC) Trading and Markets Department's letter of no enforcement action to DTC dated December 11, 2025 — as long as the arrangement proceeds as described in the DTC, staff will not recommend enforcement action within three years. This is an employee-level exemption for a limited period of time, not a permanent authorization. According to DTCC's plan, Canton is the only public network to be connected on the first day. Stellar is expected to be connected in 2027, and more networks will be expanded in the future.
Although the specific types and sizes of the stocks and treasury bonds that have been tokenized this time have not been disclosed, this strategic direction is clear. Earlier, Morgan Stanley also announced plans to support tokenized stock trading in its self-developed Alternative Trading System (ATS) in the first quarter of 2027.
This strategy aims to simultaneously promote the issuance of tokenized securities based on existing financial infrastructure and the construction of an actual trading market, forming a closed loop in the entire chain from issuance to trading. Through DTS services, Morgan Stanley is not only exploring new technology paths, but also redefining securities liquidity, collateral mobility, and capital efficiency. This model, which combines the robustness of traditional finance with the flexibility of blockchain technology, may become the mainstream paradigm for asset management in the future. With the addition of more financial institutions, the depth and breadth of the tokenized securities market is expected to expand further.