Morgan Stanley to launch tokenized equity products in Q1 2027

Morgan Stanley announced it will begin offering tokenized equity products in the first quarter of 2027, according to the head of its digital asset strategy. The firm said it is building the infrastructure needed to support the issuance, trading and settlement of tokenised shares and is monitoring developments in the broader market to time its launch.

Tokenised equities turn traditional shares into digital tokens that can be traded on blockchain platforms. Proponents say the technology can lower transaction costs, speed up settlement, and open up fractional ownership to a wider pool of investors. The global market for tokenised securities is expected to grow from a few hundred million dollars in 2023 to over $10 billion by 2026, driven by regulatory clarity in the U.S. and Europe and the rise of digital asset exchanges. Banks that already run crypto desks, such as JPMorgan and Goldman Sachs, are experimenting with tokenised bonds and real‑estate assets, while regulators in the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission have issued guidance that could allow tokenised shares to be treated as securities under existing rules.

Morgan Stanley’s plan involves partnering with a blockchain infrastructure provider that can handle the issuance and custody of tokens, as well as a regulated clearinghouse that can bridge the tokenised and traditional markets. The firm will also develop a compliance framework to meet KYC, AML and securities reporting requirements. The digital asset head said the bank will run a pilot with a small set of institutional clients before expanding to retail investors. Industry observers note that the move could give Morgan Stanley a competitive edge, as it positions itself as a bridge between conventional finance and the emerging tokenised ecosystem.

The next phase will involve finalising the technology stack, securing regulatory approvals and launching a pilot program in Q3 2026. If the pilot proves successful, Morgan Stanley could roll out tokenised equity trading to its broader client base by the end of 2027. The timing of the launch reflects growing demand from investors for digital asset solutions and the maturation of the regulatory framework that will allow tokenised securities to coexist with traditional equities.