Morgan Stanley has moved its target for supporting tokenized equities to the first quarter of 2027. The bank previously expected to enable trading during the second half of 2026. Limited products and weak institutional demand have slowed the rollout.
The updated timeline was disclosed by Amy Oldenburg, Head of Digital Asset Strategy at Morgan Stanley, in an interview at TOKEN2049 in Singapore. The updated timeline relates to tokenization of equities via alternative trading systems and not a new crypto exchange platform by Morgan Stanley.
Why Did Morgan Stanley Delay Its Rollout?
Oldenburg attributed the delay to a lack of adequate tokenized products. She noted that there is limited interest by institutions until we have the proper tokenized products to be able to support them within our ATS.
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According to the bank, the platform will leverage its Trajectory Cross alternative trading system. It facilitates the matching of securities orders off of public markets and currently handles equities, ETFs, and American Depositary Receipts. The new capability will enable the trading of tokenized equity through blockchain-based securities.
Oldenburg had previously set a timeline for the end of 2026 at the Digital Asset Summit event in March. She was talking about the expansion of current capabilities of trading platforms. The recent development shifts the timeline to next year.
Regulatory issues still represent a concern for the institutional firms. Oldenburg highlighted issues around permission from the Federal Reserve and problems after the inability to move forward with the CLARITY Act. There was no mention of a technological glitch or further costs of the project.
DTCC’s October Launch Draws Attention
Morgan Stanley is monitoring the upcoming DTCC’s tokenization solution. The latter is scheduled to be released in October 2026. According to Oldenburg, this is going to be an important market innovation.
In May, DTCC announced that more than 50 organizations joined their working group. This group included asset managers, custodians, brokers, and digital asset organizations. The main goal of the program is to introduce blockchain-based records into traditional securities custody.
On July 15, DTCC announced successful transactions through tokenized assets in their depository. Over 30 organizations took part in the transaction that included equities, Treasury transactions, and collateral processes.
The upcoming tokenization service will enable eligible securities to transfer from traditional to tokenized form and vice versa. As explained by DTCC, such blockchain-based records retain all ownership rights and investor protections of the underlying securities.
SEC Opens Limited Route for Tokenized Stocks
Furthermore, the SEC announced on September 17 a temporary exemptive relief measure. This would allow eligible facilities to conduct trades in tokenized US equities via permissioned automated market makers. The order contains restrictions on securities and volumes of transactions.
Tokenized securities shall offer the same benefits as their traditional counterparts. Facilities must also inform the issuer regarding trading of certain securities that were tokenized by third parties. Trading should be suspended if the underlying security is suspended from its main exchange.
This order does not mean that Morgan Stanley will get the green light to conduct its planned ATS service. It still has to comply with all necessary regulations.
Bank Builds Wallet and Custody Services
Also, Morgan Stanley is creating the infrastructure of a wallet for those customers who own digital assets and tokenized products. According to Oldenburg, the bank created the custodial wallet, which is aimed at masking many details from the customer.Â
Recently, the company created its Digital Asset Lab, which evaluates different blockchain-based applications. This lab checks risks of products before offering them to the customers. Also, according to Oldenburg, the bank sees some tokenization opportunities in such products as private shares, structured notes, and private funds.
Finally, in June, the OCC provided the preliminary conditional approval for the national trust bank—Morgan Stanley Digital Trust. This trust bank will offer digital asset custody and other services. Of course, the bank needs to fulfill the conditions of the regulator to obtain the full approval.
Oldenburg believes that the market for tokenized real-world assets will grow from $3 trillion to $10 trillion by 2030. It should be mentioned that this number is the prediction of Oldenburg. At the moment, the new schedule of the bank takes into account the difference between building the trading system and creating the product for the institutional customers.
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