Morgan Stanley Plans to Launch Spot Bitcoin Trading for E*Trade Retail Clients

Morgan Stanley, a leading wealth manager and bank with an AUM of $1.7 trillion, is preparing to offer spot crypto trading on its E*Trade brokerage platform. According to a Bloomberg report today, Morgan Stanley plans to list popular cryptocurrencies like Bitcoin on the platform. The initiative would allow the banking giant’s E*Trade retail clients to buy and sell crypto assets directly from their existing brokerage accounts.  Still Early  Bloomberg reports that while the plan is still in its early stages, Morgan Stanley expects to launch the spot crypto trading service by next year.  In the meantime, it is exploring potential partnerships with established crypto entities, which will provide the necessary infrastructure for the service. It bears mentioning that Morgan Stanley has been having internal discussions about launching a crypto trading service on its E*Trade brokerage platform since late last year.  In January, Morgan Stanley reportedly explored the E*Trade crypto marketplace. At the time, the move was fueled by its anticipation of a favorable regulatory environment in the U.S. under Donald Trump’s administration.  Interestingly, the bank is proceeding with the plans to launch the E*Trade crypto trading service by 2026.  Morgan Stanley’s Previous Exposure to Crypto  Prior to this time, Morgan Stanley already had significant exposure to crypto. The bank offers its rich clients access to crypto-related products, including futures and exchange-traded funds (ETFs).  In August, it gave its financial advisers the green light to pitch Bitcoin ETFs to these wealthy investors. At the time, the recommendation was restricted to only BlackRock and Fidelity Investments’ Bitcoin ETFs. Two months later, the wealth manager disclosed in a 13F-HR/A filing that it holds about $272 million worth of Bitcoin ETF shares.  While Morgan Stanley’s high-net-worth clients already have exposure to cryptos, this latest initiative would be the bank’s first crypto-related offering targeting everyday E*Trade users. If launched, Morgan Stanley would be in stiff competition with established exchanges like Kraken and Coinbase.  Besides Morgan Stanley, other traditional financial institutions like Charles Schwab are also considering launching crypto trading services. Others have also launched the service in different parts of the world. For instance, Spain’s second-largest bank secured a license to provide its retail clients with crypto trading and custody services.  Positive Regulatory Environment Fuels Morgan Stanley Crypto Push    Meanwhile, the latest development comes as the United States continues to roll out pro-crypto regulation since Trump’s inauguration. Last month, the Federal Reserve rescinded 95% of its anti-crypto regulation, allowing banks to engage in crypto activities without obtaining permission.   Additionally, Trump has ordered several U.S. agencies, like the SEC, to establish clear and fair regulations for the industry. Amid these regulatory efforts, Morgan Stanley has commenced plans to launch crypto trading services on its E*Trade platform.  However, at the time of this publication, the bank had yet to issue a public comment confirming the development.