US Stocks and 400-Ounce Gold Bars Move Toward Tokenization as Morgan Stanley and Hong Kong Expand Onchain Finance

• Tokenization is gaining momentum as Morgan Stanley explores bringing US stocks and Treasuries onto blockchain networks
• US stocks and Treasury securities can now be represented as digital tokens through DTCC’s new service, while retaining ownership rights and investor protections
• Hong Kong gold market plans to expand its tokenization efforts through digital tokens representing standard 400-ounce gold bars

Tokenization is now gaining a stronger momentum in the current financial domain. Financial institutions are now readily exploring tokenization trends to onboard stocks and bonds into blockchain networks. Morgan Stanley has started using a new system to tokenize US stocks and treasuries. At the same time, Hong Kong is also preparing for a project that will turn standard gold bars into digital tokens. These developments show how the tokenization trend is now gaining a broader horizon with institutions taking interest in the trend.

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Morgan Stanley Brings US Stocks and Treasuries Onchain

Morgan Stanley has joined the growing list of institutions using the Depository Trust and Clearing Corporation (DTCC)’s new tokenization service. The bank has started tokenizing US stocks and treasuries through its system, becoming one of its first participating institutions.

DTCC launched this service on October 28. Under this service, the agency allows eligible financial institutions to create blockchain-based representations of securities held by its depository subsidiary, the Depository Trust Company (DTC).

“Morgan Stanley, with $10.5 TRILLION in client assets, has started tokenizing U.S. stocks and Treasurys through DTCC. This creates digital tokens investors can move on-chain between wallets, much like crypto. Morgan Stanley is among the first banks to use the service and one of 20 firms that signed up for access.”

These tokens retain all their necessary ownership rights, investor protections, and economic benefits of their traditional counterparts. Per the DTCC official announcement, eligible users will also be able to convert between traditional and tokenized formats. The initiative has already attracted leading institutions to test the service, including leading names like JPMorgan, Morgan Stanley, UBS, Citi, etc.

“To date, 20 DTC Participants (clients) have signed agreements to access DTS including Alpaca, Apex Clearing Corporation, Barclays, Bank of America, BNP Paribas, Brown Brothers Harriman, Citadel Securities, Citi, Clear Street, DriveWealth, Edward Jones, Fidelity Investments, Interchange Clearing, J.P. Morgan, Marex, Mirae Asset Securities (USA) Inc., Morgan Stanley, State Street, UBS and Velocity Capital LLC. Future users will be onboarded on a rolling basis.”

This service intends to initially support selected Russell 1000 stocks, ETFs tracking major indexes, and major US treasury securities.

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Hong Kong Gold Bar Tokenization Plan

In another similar example of the tokenization trend gaining serious momentum, Hong Kong is now ready to join this trend. The government of Hong Kong is now planning to launch an interbank gold tokenization project. This project intends to tokenize a standard 400-ounce gold bar, represented by a digital token.

This initiative intends to bolster Hong Kong’s wider effort to become a leading gold trading hub. Christopher Hui, Financial Secretary of Hong Kong, shared how this project intends to build on the existing work that the city has been doing to strengthen blockchain-based infrastructure.

Tokenization Trend Continues To Take The Market Lead

The examples listed above are proof enough, explaining how the trend of tokenization is gaining a steady momentum. As tokenization represents a digital version of existing traditional assets, it shows how the world is quickly catching up with the idea of onchain finance.

The major contributor to this trend would be the growing accessibility and visibility that traders now wish to experiment with, as onchain finance methods can offer 24/7 transfers, subject to platform rules and regulatory restrictions.

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