According to Amy Oldenburg, Morgan Stanley's head of digital asset strategy, the bank expects bitcoin to eventually be included on US bank balance sheets, but several key obstacles must be overcome. Speaking at the Bitcoin Conference in Las Vegas, Oldenburg outlined the firm's efforts to expand its digital asset business as client demand grows. Oldenburg stated that the regulatory environment has become more supportive in recent years, allowing the firm to become more involved in the digital asset space.
She also suggested that US banks may eventually hold bitcoin on their balance sheets, but noted that several barriers, including the Federal Reserve, Basel rules, and the need for multiple global regulators, must be addressed before a bank like Morgan Stanley can start holding bitcoin. This is not the first time a major bank has expressed interest in the digital asset sector, as BNY CEO Robin Vince recently stated that large financial institutions will drive the next phase of crypto adoption. However, Oldenburg emphasized that regulatory clarity is necessary before banks can fully engage with the sector. Morgan Stanley has already taken steps to enter the digital asset space, including the launch of MSBT, a bitcoin-backed exchange-traded product that 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 highlighted the gap between the products offered by advisors and client demand, noting that Morgan Stanley recommends a 2-4% bitcoin allocation to clients, but adoption among advisors has been slow due to a lack of education.
To address this issue, the bank has launched internal training programs to bring financial advisors up to speed. The appetite for regulated bitcoin exposure is evident, with BlackRock's IBIT amassing over $61 billion in assets. Additionally, 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.