Morgan Stanley Mulls Crypto Trading Launch Through E-Trade Platform: Report

American multinational investment bank Morgan Stanley is reportedly exploring launching crypto trading services through its E-Trade platform.

On Jan. 2, The Information reported that the bank’s decision to launch this service is based on the second Trump administration’s promise of a more favorable regulatory environment for digital assets.

To support this initiative, the bank is preparing to offer E-Trade customers direct access to crypto trading. It plans to start with major coins like Bitcoin and Ethereum. However, to proceed, the bank must secure regulatory approval from the Federal Reserve. This is required because of its classification as a bank holding company.

Morgan Stanley didn’t return Cryptonews’ request for comment by press time.

Trump Promises Crypto-Friendly Reforms to Cement US as a Global Leader

Meanwhile, Trump, during his presidential campaign, made bold promises to the crypto industry, with the goal of making the US the “world’s crypto capital.” His approach involves placing pro-crypto individuals in leadership roles at key regulatory agencies.

He’s also pledged to foster a more lenient regulatory climate for digital currencies. This strategy includes potentially giving more regulatory control to the CFTC over digital assets, which would mean moving some oversight away from the SEC to the CFTC, known for being more crypto-friendly.

E-Trade’s Crypto Trading Ambitions Could Challenge Coinbase’s Dominance

Morgan Stanley completed its acquisition of E-Trade in late 2020 through an all-stock deal valued at $13b. This acquisition expanded Morgan Stanley’s wealth management operations by merging with E-Trade’s retail customer base and digital platform.

By adding crypto trading to E-Trade’s platform, Morgan Stanley could bring digital assets to a broader audience. This includes E-Trade’s 5.2m clients managing $360b in assets. Such a move could significantly increase retail participation in the crypto market and position E-Trade as a leading traditional brokerage offering crypto services, directly challenging Coinbase.

Consequently, this would heighten competition with existing crypto platforms like Coinbase. E-Trade could potentially capture market share by offering competitive pricing or seamlessly integrating crypto with its current financial services.

Notably, last year, Morgan Stanley allowed its financial advisors to offer spot Bitcoin ETFs to select clients, becoming a pioneer among major Wall Street banks. The bank reportedly monitored clients’ crypto investments closely to limit exposure to the volatile asset class. This approach helps maintain balanced portfolios.