According to Amy Oldenburg, Morgan Stanley's head of digital asset strategy, the inclusion of bitcoin on US bank balance sheets is imminent, although several obstacles need to be addressed. 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 over the years, allowing the firm to make significant strides in the digital asset space. Oldenburg also mentioned that US banks may eventually hold bitcoin on their balance sheets, but this would require overcoming hurdles such as Federal Reserve regulations, Basel rules, and the need for global regulatory coordination.
Morgan Stanley has already made significant progress in this area, having launched the first bank-issued Bitcoin ETP, which attracted over $100 million in investments within its first six days of trading. The product's success can be attributed to self-directed clients, as the firm's financial advisors had not yet begun offering it. Oldenburg emphasized that there is a significant gap between the products offered by advisors and client demand, with 80% of ETP exposure on the wealth platform being self-directed.
To address this issue, the bank has launched internal training programs to educate financial advisors about digital assets. Furthermore, 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.