Morgan Stanley, a financial powerhouse managing approximately $8 trillion in assets, is intensifying its engagement with cryptocurrency by submitting an application for a de novo national trust bank charter. This regulatory move, reported on February 18, allows the institution to custody digital assets for its clients, marking a significant step in the growing acceptance of cryptocurrency within traditional finance.
The application, filed with the Office of the Comptroller of the Currency, is aimed at establishing “Morgan Stanley Digital Trust, National Association.” This charter would not only enable the bank to enhance its digital asset custody services but also expand into staking, as well as facilitating purchases, sales, swaps, and transfers on behalf of its clientele.
A national trust bank charter empowers financial entities to conduct fiduciary activities, encompassing trust services and asset safekeeping. The term “de novo,” derived from Latin meaning “anew,” signifies that this entity will be newly established rather than being a continuation of an existing institution.
This application signifies a pivotal shift in Morgan Stanley”s approach to digital assets. After previously maintaining a cautious stance, the firm is now proactively integrating cryptocurrency into its offerings, aligning with a broader trend across Wall Street where traditional financial institutions are increasingly investing in digital assets.
Earlier this year, Morgan Stanley announced plans to launch exchange-traded funds (ETFs) focused on spot Bitcoin, Solana, and staked Ether, alongside exploring wallet technology for its wealth management platform. This strategic direction reflects an adaptive response to the evolving landscape of finance.
The recent surge in national trust bank charter applications reflects a competitive race among institutions to establish themselves in the crypto banking space. In December, the Office of the Comptroller of the Currency granted conditional approvals to five firms, including Ripple, Circle, BitGo, Fidelity Digital Assets, and Paxos, for crypto-focused national trust banks. Additionally, Bridge, a stablecoin platform owned by Stripe, and Crypto.com also secured initial approvals, showcasing the increasing institutional interest in the cryptocurrency sector.
This momentum comes amidst a regulatory environment that has been historically challenging for crypto firms in the United States. As the industry seeks to gain more integration with traditional banking services, the current administration has indicated a willingness to support the growth of the crypto sector, potentially easing barriers that have previously hindered its expansion.
