Morgan Stanley has announced major details of their cryptocurrency plan. The investment bank is preparing to add cryptocurrency trading capabilities to its E*Trade platform. According to people familiar with the matter, the firm is in the early stages of developing this service with plans to launch sometime next year.
Morgan Stanley to collaborate with crypto firms for the launch
People familiar with the matter told Bloomberg that the discussion inside Morgan Stanley started in full-fledged last year. Now the company executives believe that the next move should be to introduce spot trading on E*Trade.
The bank is considering partnerships with established cryptocurrency firms to allow the buying and selling of popular tokens such as Bitcoin and Ethereum for its brokerage clients. Morgan Stanley’s cryptocurrency plans come amid substantial changes in the regulatory environment following President Trump’s return to office.
During his campaign, Trump actively engaged with the cryptocurrency community. This includes his own digital collectibles and accepting campaign donations from crypto supporters while promising to make the United States the “crypto capital of the planet.”
Since his inauguration, the administration has moved quickly to remove barriers that previously discouraged banks from interacting with digital assets. Key regulatory changes include an executive order issued in the early days of Trump’s presidency aimed at promoting US “leadership in digital assets and financial technology while protecting economic liberty.” The bank’s statement comes as Eric Trump stated in a recent interview that the crypto market could replace banks in 10 years.
The investment bank’s move could be challenging for Robinhood
Morgan Stanley’s entry into retail cryptocurrency trading through its E*Trade platform could be competition for other crypto-focused brokerages. Depending on how the bank’s plans work out, this move may pose a direct challenge to firms like Robinhood Markets and Coinbase.
Robinhood has offered cryptocurrency trading for over five years and generated substantial revenue from this business segment. In 2023, crypto trading accounted for $626 million which was 21% of Robinhood’s total net revenue. The company’s first-quarter profit more than doubled as policy changes under the Trump administration boosted trading activity.
Traditional banks have largely remained cautious about cryptocurrency involvement over the past decade. This is primarily due to concerns about security, volatility, and unclear regulations. Issues around safeguarding digital assets from hacks and scams were other obstacles, as were regulatory uncertainties about banks accepting deposits from cryptocurrency ventures.
For Morgan Stanley, the move will ramp up its existing cryptocurrency offerings. The bank already provides its wealthy clients with access to crypto exchange-traded funds, ETF options, and futures. Former Morgan Stanley CEO James Gorman expressed early interest in cryptocurrency. He also stated in 2017 that Bitcoin was “more than just a fad.”
This information surfaced as Eric made a bold prediction regarding crypto at Token2049. During a discussion, Eric stated that crypto could replace SWIFT payment system.
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