Morgan Stanley anticipates that bitcoin will eventually be included on the balance sheets of US banks, albeit with several major hurdles to clear, as stated by Amy Oldenburg, the bank's head of digital asset strategy, during her address at the Bitcoin Conference in Las Vegas. Oldenburg outlined the groundwork being laid by the firm for expanding its digital asset business in response to growing client demand. She noted that the regulatory environment has become more supportive over the years, facilitating the bank's involvement in the broader digital asset space.
However, Oldenburg pointed out that before a bank the size of Morgan Stanley can start holding bitcoin on its balance sheet, several barriers must be overcome, including the Federal Reserve, Basel rules, and the necessity for multiple global regulators. This sentiment is not new, as BNY CEO Robin Vince previously stated that large financial institutions will drive the next phase of crypto adoption, but they first require regulatory clarity. Morgan Stanley is taking proactive steps, having recently launched MSBT, a bitcoin-backed exchange-traded product, which attracted over $100 million in its first six days of trading, with all inflows coming from self-directed clients.
Oldenburg highlighted the significant demand for such products and the gap between what advisors offer and client demand. To address this, Morgan Stanley has initiated internal training programs for financial advisors, as the slow adoption is attributed to an education problem. The bank is also pursuing an OCC digital trust charter to enable direct crypto custody and spot crypto trading on its wealth platform.