Morgan Stanley anticipates that bitcoin will eventually be included on US bank balance sheets, although several key challenges remain, according to Amy Oldenburg, the bank's head of digital asset strategy. Oldenburg, who was recently appointed to this position, discussed the firm's efforts to expand its digital asset business as client demand grows during the Bitcoin Conference in Las Vegas. She stated that the regulatory environment has become more supportive over the years, allowing the firm to engage in the broader digital asset space.
However, Oldenburg noted that US banks may eventually hold bitcoin on their balance sheets, but this will require overcoming several barriers, including the Federal Reserve, Basel rules, and the need for coordination among multiple global regulators. This development is consistent with previous statements from banking giants, such as BNY CEO Robin Vince, who said that large financial institutions will drive the next phase of crypto adoption by serving as a bridge between traditional finance and digital assets, but first need regulatory clarity. Morgan Stanley has already begun its push into the digital asset space with the launch of MSBT, a bitcoin-backed exchange-traded product, which attracted over $100 million in its first six days of trading, entirely 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 recommends a 2%-4% bitcoin allocation to clients and has launched internal training programs to educate financial advisors.
The bank is also pursuing an OCC digital trust charter to custody crypto directly and offer spot crypto trading on its wealth platform.