Morgan Stanley Foresees Bitcoin on U.S. Bank Balance Sheets

U.S. banks may eventually hold bitcoin on their balance sheets.

U.S. banks may eventually hold bitcoin on their balance sheets, despite current regulatory hurdles. This view was expressed by Amy Oldenburg, head of Morgan Stanley’s digital assets division, at a conference in Las Vegas, as reported by CoinDesk.

The bank launched an exchange-traded product (ETP) based on the first cryptocurrency under the ticker MSBT. In the first six days of trading, the instrument attracted over $100 million.

The entire inflow was provided by retail clients through self-directed investment tools. According to Oldenburg, at that time, the bank’s financial advisors had not yet started offering the product to clients.

Morgan Stanley recommends allocating 2% to 4% of a portfolio to bitcoin, though advisors are slowly adopting the new instrument. The bank attributes this to a lack of knowledge among staff and has already launched internal training programs. Currently, 80% of investments in crypto-ETP through the financial institution’s platform are made by clients independently.

Oldenburg did not rule out that bitcoin might appear on Morgan Stanley’s own balance sheet in the future. However, she cautioned that due to the requirements of the Fed, Basel Committee rules, and the stance of international regulators, this process will take longer than many market participants expect.

The bank continues to expand its presence in the industry. Morgan Stanley is pursuing a trust license from the OCC — this would allow the organization to directly custody digital assets and launch spot cryptocurrency trading on its own platform. Currently, Coinbase and BNY act as custodians for the MSBT product.

Back in March, Morgan Stanley filed an S-1 form with the SEC to launch a spot bitcoin ETF.