According to Amy Oldenburg, Morgan Stanley's head of digital asset strategy, the bank anticipates that bitcoin will eventually be included on US bank balance sheets, although several key obstacles still need to be overcome. Oldenburg discussed the company's efforts to expand its digital asset business in response to growing client demand at the Bitcoin Conference in Las Vegas. She noted that the regulatory environment has become more favorable for the bank to engage in the digital asset space over the years. Oldenburg also mentioned that US banks may eventually hold bitcoin on their balance sheets, but highlighted the need for clarity from multiple global regulators, the Federal Reserve, and compliance with Basel rules.
This isn't the first time a major bank has expressed its intention to venture into the digital asset sector. BNY CEO Robin Vince stated that large financial institutions will drive the next phase of crypto adoption by acting as a bridge between traditional finance and digital assets, but emphasized the need for regulatory clarity. Morgan Stanley has already begun its foray into the digital asset space with the launch of MSBT, a bitcoin-backed exchange-traded product, which attracted over $100 million in its first six days of trading.
Notably, these inflows came entirely from self-directed clients, demonstrating significant demand for such products. Oldenburg emphasized the gap between the products offered by advisors and client demand, citing the slow adoption of bitcoin allocation among advisors due to a lack of education. To address this, the bank has launched internal training programs to educate financial advisors.
The appetite for regulated bitcoin exposure is evident, with BlackRock's IBIT amassing over $61 billion in assets. Furthermore, Morgan Stanley is pursuing an OCC digital trust charter, which would enable the bank to custody crypto directly and offer spot crypto trading on its wealth platform.