Morgan Stanley Moves Assets Onchain Using Wall Street Infrastructure

Morgan Stanley has initiated the process of shifting traditional financial assets onto blockchain technology, utilizing established financial infrastructure rather than alternative networks. The financial institution announced on Tuesday that it has become an early participant in the DTCC Tokenization Service, successfully converting United States equities and government bonds into digital formats.

Operated by the Depository Trust Co., a subsidiary of the Depository Trust & Clearing Corp., the system launched on October 28. The DTC functions as the primary post-trade settlement engine for American markets, currently managing over one hundred trillion dollars in custodial assets. Major traditional financial institutions are closely watching developments on Wall Street as these legacy operators adopt distributed ledger technology.

The newly established offering allows authorized entities to transform securities held within the DTC into digital twins, which can subsequently be transferred to preferred digital wallets and returned when necessary. According to the platform operators, the resulting tokens retain identical investor protections, ownership rights, and economic benefits as their underlying traditional securities. The design facilitates rapid collateral movement and grants access to new liquidity sources within minutes.

Traditional financial infrastructure is moving onchain as major banks begin tokenizing securities.

At present, the system operates across the Canton Network alongside a private Besu network managed by the operator, with additional blockchain integrations scheduled for 2027. Morgan Stanley joins a cohort of twenty participant firms currently signed up for the platform. Other institutions involved include Bank of America, Citigroup, JPMorgan Chase, Fidelity Investments, Citadel Securities, and UBS, with the overall service developed following consultations involving more than 150 organizations.

This deployment follows a regulatory clearance pathway initiated in December 2025, when securities regulators issued a no-action letter permitting the DTC to facilitate the tokenization of major index exchange-traded funds, select large-cap shares, and federal debt instruments. Concurrently, separate crypto-native initiatives attempting to tokenize equity shares have faced direct resistance from major corporations objecting to third-party listings on alternative venues.

Why it matters

The adoption of blockchain rails by systemically important financial institutions bridges traditional market custody with distributed ledger networks. By leveraging established post-trade infrastructure, major banks can streamline collateral mobility and reduce settlement times for digital assets.