According to Amy Oldenburg, Morgan Stanley's head of digital asset strategy, the inclusion of bitcoin on US bank balance sheets is inevitable, although several obstacles need to be overcome. Oldenburg outlined the bank's plans to expand its digital asset business in response to growing client demand during the Bitcoin Conference in Las Vegas. She emphasized that the regulatory environment has become more supportive over the years, allowing the firm to lay the groundwork for expansion.
However, Oldenburg pointed out that US banks, including Morgan Stanley, must navigate challenges such as Federal Reserve regulations, Basel rules, and multiple global regulators before they can hold bitcoin on their balance sheets. 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. Morgan Stanley has already made significant strides, launching MSBT, a bitcoin-backed exchange-traded product, which attracted over $100 million in its first six days of trading.
Notably, these inflows came from self-directed clients, demonstrating substantial demand for such products. Oldenburg highlighted the gap between advisor offerings and client demand, citing an education problem among advisors.
To address this, Morgan Stanley has launched internal training programs and recommends a 2%-4% bitcoin allocation to clients. The bank is also pursuing an OCC digital trust charter to enable direct crypto custody and spot trading on its wealth platform. Furthermore, the success of BlackRock's IBIT, which has amassed over $61 billion in assets, demonstrates the established appetite for regulated bitcoin exposure.