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 obstacles must be overcome. Oldenburg, who was recently appointed to lead the bank's digital asset strategy, highlighted the firm's efforts to lay the groundwork for expanding its digital asset business as client demand grows.
Speaking at the Bitcoin Conference in Las Vegas, Oldenburg noted that the regulatory environment has become more supportive over the years, allowing the firm to increase its involvement in the digital asset space. While US banks may eventually hold bitcoin on their balance sheets, Oldenburg cited several barriers, including the Federal Reserve, Basel rules, and the need for multiple global regulators, that must be addressed before a bank like Morgan Stanley can start putting bitcoin on its balance sheet. This is not the first time a major bank has predicted that financial institutions will drive the next phase of crypto adoption by serving as a bridge between traditional finance and digital assets, but regulatory clarity is needed before they can fully invest in the sector.
Morgan Stanley has already made significant strides in the digital asset space, including the launch of MSBT, a bitcoin-backed exchange-traded product that drew over $100 million in its first six days of trading, with all inflows coming from self-directed clients. Oldenburg noted that there is a significant gap between what advisors are offering clients and where demand lies, with Morgan Stanley recommending a 2%-4% bitcoin allocation to clients, but slow adoption among advisors due to an education problem.
The bank has launched internal training programs to bring financial advisors up to speed, and Oldenburg highlighted the significant demand for regulated bitcoin exposure, citing BlackRock's IBIT, which has amassed over $61 billion in assets. Additionally, Morgan Stanley is pursuing an OCC digital trust charter, which would allow the bank to custody crypto directly and offer spot crypto trading on its wealth platform.