Morgan Stanley anticipates that bitcoin will eventually appear on US bank balance sheets, although several key obstacles must be overcome, as stated by Amy Oldenburg, the bank's head of digital asset strategy. At the Bitcoin Conference in Las Vegas, Oldenburg outlined the firm's groundwork for expanding its digital asset business in response to growing client demand. 'The regulatory environment has been more supportive for us to do that, and we've been involved in the broader digital asset space for many years,' Oldenburg noted.
Oldenburg, who is set to speak at CoinDesk's Consensus Miami conference, 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 isn't the first time a banking giant has stated that banks will eventually push further into the digital asset sector, with BNY CEO Robin Vince saying in March that large financial institutions will drive the next phase of crypto adoption by serving as a bridge between traditional finance and digital assets, although they first need regulatory clarity. Morgan Stanley, however, is not standing still and has already begun its push into the digital asset space, according to Oldenburg. The banking giant recently launched MSBT, a bitcoin-backed exchange-traded product, and the first of its kind from a US-chartered bank, which drew over $100 million in its first six days of trading, with all inflows coming from self-directed clients.
Oldenburg noted that this dynamic demonstrates significant demand for such products from clients and 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. The slow adoption among advisors is due to an education problem, Oldenburg stated, adding that the bank has launched internal training programs to bring financial advisors up to speed.
Furthermore, Oldenburg said 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.