Amy Oldenburg, head of digital asset strategy at Morgan Stanley, said the bank expects Bitcoin to enter the balance sheets of U.S. banks, although major obstacles remain.
Oldenburg, who was named the new head of digital asset strategy this year, spoke at the Bitcoin Conference in Las Vegas, outlining how the company is laying the groundwork to expand its digital assets business as customer demand increases.
“Over the years, we have been involved in the broader digital asset space, and the regulatory environment has become more supportive of us doing so,” Oldenburg said.
Oldenburg, who will speak at the CoinDesk Consensus Conference in Miami this week, also said that U.S. banks could end up holding Bitcoin on their own balance sheets. However, she pointed to some obstacles, such as the Federal Reserve, Basel rules and the need for multiple global regulators before a bank of Morgan Stanley’s size can begin to include Bitcoin on its balance sheet.
This isn’t the first time a banking giant has said banks will eventually move further into digital assets. Bank of New York CEO Robin Vince said in March that large financial institutions will drive the next phase of cryptocurrency adoption by acting as a bridge between traditional finance and digital assets. Although banks first need regulatory clarity before going all-in on the industry.
However, Oldenburg said that Morgan Stanley has not stood still and has begun to enter the field of digital assets. The banking giant recently launched MSBT, an exchange-traded product powered by Bitcoin and the first of its kind from a U.S. chartered bank. The product attracted more than $100 million in funding in its first six days on the market.
What’s particularly striking about these inflows is that they come entirely from self-directed clients, and Morgan Stanley’s own financial advisors haven’t even begun offering the product, Oldenburg said.
“All of this is self-directed and not even in the consultation on the wealth platform,” she said. This dynamic indicates that there is huge customer demand for such products.
Oldenburg said there is a huge gap between what advisers offer clients and what is needed. Oldenburg said that while Morgan Stanley recommends clients allocate 2%-4% to Bitcoin, advisors’ slow adoption of Bitcoin is due to education issues. She also noted that 80% of ETP exposures on the wealth platform are self-directed and that the bank has launched an internal training program to enable financial advisors to get up to speed.
Interest in regulated Bitcoin exposure is already established, with BlackRock’s IBIT amassing more than $61 billion in assets, making it the fastest-growing ETF in history since its launch in January 2024.
Additionally, Oldenburg said that Morgan Stanley is seeking an OCC digital trust charter that would allow the bank to directly custody cryptocurrencies and offer spot cryptocurrency trading on its wealth platform. The MSBT product itself uses Coinbase and BNY Mellon as dual custodians.
Read more: Wall Street’s push for cryptocurrencies has been years in the making, says Morgan Stanley