Morgan Stanley Predicts Bitcoin Could Soon Appear on U.S. Bank Balance Sheets

Morgan Stanley's digital assets chief, Amy Oldenburg, has indicated that U.S. banks might begin to include Bitcoin on their balance sheets, despite existing regulatory challenges. This insight was shared during a conference in Las Vegas.

The investment bank recently introduced an exchange-traded product (ETP) tied to Bitcoin, listed under the ticker MSBT, which garnered over $100 million in its first six days of trading, primarily driven by retail investors using self-investment tools.

While Morgan Stanley suggests investors allocate between 2% to 4% of their portfolios to Bitcoin, the bank's advisors are gradually adapting to this new offering, hindered by a knowledge gap. To address this, Morgan Stanley has initiated internal training programs. Currently, approximately 80% of the investments in the crypto ETP are made independently by clients.

Oldenburg mentioned that the inclusion of Bitcoin on Morgan Stanley's balance sheet is a possibility, though she warned that due to Federal Reserve regulations, Basel Committee guidelines, and international regulatory perspectives, this transition could take longer than anticipated.

As part of its ongoing commitment to the digital asset space, Morgan Stanley is seeking a trust license from the OCC, which would enable it to hold digital assets directly and facilitate spot cryptocurrency trading on its platform. Presently, Coinbase and BNY are acting as custodians for the MSBT product.

Additionally, earlier this year, Morgan Stanley submitted an S-1 application to the SEC to establish a spot Bitcoin ETF.