Morgan Stanley, one of the largest financial services firms in the world, is exploring ways to provide cryptocurrency-related services to its clients. The bank is also considering integrating crypto into its E-Trade platform, a move driven by changes in the regulatory landscape.
Ted Pick, the CEO of Morgan Stanley, discussed the company’s interest in crypto during an interview with CNBC at the World Economic Forum in Davos. He emphasized the importance of aligning with regulators, stating:
“For us, the equation is really around whether we, as a highly regulated financial institution, can act as transactions. We’ll be working with Treasury and the other regulators to figure out how we can offer that in a safe way.”
Morgan Stanley’s Foray into Crypto Markets
Morgan Stanley has gradually ventured into the crypto space. In 2024, the firm gained exposure to digital assets by recommending Bitcoin exchange-traded funds (ETFs) to its clients. The decision marked a significant milestone in the bank’s adoption of crypto as an investment option.
In January 2024, Andrew Peel, Morgan Stanley’s head of digital asset markets, shared his perspective on digital currencies, highlighting their potential to disrupt traditional financial systems. He described Bitcoin and central bank digital currencies (CBDCs) as transformative technologies that could challenge systems like SWIFT, the global interbank messaging protocol.
By August 2024, Morgan Stanley officially allowed its financial advisors to offer Bitcoin ETFs to clients, further solidifying its position in the digital asset market.
Mixed Reactions to Bitcoin ETFs
The decision to offer Bitcoin ETFs sparked criticism from some experts. John Reed Stark, the former Chief of Internet Enforcement at the Securities and Exchange Commission (SEC), voiced strong opposition.
Stark warned that Morgan Stanley’s move would likely draw intense regulatory scrutiny, stating:
“Morgan Stanley has just voluntarily subjected themselves to what will likely become the largest SEC and FINRA examination sweep in history.”
Despite concerns, Morgan Stanley disclosed on August 14, 2024, that it held $188 million in Bitcoin ETF assets, distributed across more than 5.5 million shares of BlackRock’s iShares Bitcoin Trust ETF.
