According to Amy Oldenburg, Morgan Stanley's head of digital asset strategy, the inclusion of Bitcoin on US bank balance sheets is inevitable, but several obstacles must be overcome first. Oldenburg made these remarks at the Bitcoin Conference in Las Vegas, where she outlined the firm's efforts to expand its digital asset business in response to growing client demand. She noted that the regulatory environment has become more supportive in recent years, enabling the firm to explore this space.
However, before a bank like Morgan Stanley can hold Bitcoin on its balance sheet, it must navigate challenges posed by the Federal Reserve, Basel rules, and multiple global regulators. This is not the first time a major bank has expressed interest in entering the digital asset sector, with BNY CEO Robin Vince stating that large financial institutions will drive the next phase of crypto adoption. Morgan Stanley has already made significant strides in this area, launching MSBT, a bitcoin-backed exchange-traded product that attracted over $100 million in its first six days of trading. Notably, these inflows were entirely self-directed, demonstrating strong client demand for such products.
Oldenburg highlighted the existing gap between the products offered by advisors and client demand, attributing the slow adoption among advisors to a lack of education. To address this, Morgan Stanley has initiated internal training programs and recommends a 2%-4% Bitcoin allocation to clients. The bank is also pursuing an OCC digital trust charter, which would enable it to custody crypto directly and offer spot crypto trading on its wealth platform.
The appetite for regulated Bitcoin exposure is evident, with BlackRock's IBIT amassing over $61 billion in assets since its launch in January 2024.