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 key obstacles still need to be addressed. Speaking at the Bitcoin Conference in Las Vegas, Oldenburg outlined the firm's efforts to lay the groundwork for expanding its digital asset business in response to growing client demand. Oldenburg stated that the regulatory environment has become more supportive over the years, allowing the firm to engage in the broader digital asset space.
She also mentioned that US banks may eventually hold Bitcoin on their balance sheets, but highlighted several barriers, including the Federal Reserve, Basel rules, and the need for multiple global regulators, before a bank of Morgan Stanley's scale could start putting Bitcoin on its balance sheet. This sentiment is not new, as BNY CEO Robin Vince previously stated that large financial institutions will drive the next phase of crypto adoption by serving as a bridge between traditional finance and digital assets, but only after gaining regulatory clarity. Morgan Stanley has already begun its foray into the digital asset space, with the recent launch of MSBT, a Bitcoin-backed exchange-traded product, which drew over $100 million in its first six days of trading, entirely from self-directed clients. Oldenburg noted that this dynamic demonstrates significant demand for such products from clients.
She also pointed out that there is a substantial gap between what advisors are offering and where demand lies, with Morgan Stanley recommending a 2%-4% Bitcoin allocation to clients. The slow adoption among advisors is attributed to an education problem, Oldenburg said, adding that the bank has launched internal training programs to bring financial advisors up to speed. Furthermore, Oldenburg mentioned that 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.