Morgan Stanley is seeking regulatory approval to launch exchange-traded funds (ETFs) tied to the price of cryptocurrency tokens, according to filings with the U.S. Securities and Exchange Commission (SEC) on Tuesday. This marks the first such move by a major U.S. bank, signalling a growing acceptance of digital assets within traditional finance. Morgan Stanley, a global financial services firm, provides a wide range of investment banking, wealth management, and investment management services. The company aims to serve corporations, governments, institutions, and individuals.
The bank is reportedly looking to launch ETFs tied to the prices of Bitcoin and Solana, aiming to deepen its presence in the cryptocurrency market. The move comes after regulatory clarity encouraged mainstream finance companies to embrace digital assets. In December, the Office of the Comptroller of the Currency allowed banks to act as intermediaries in crypto transactions, narrowing the gap between the traditional sector and digital assets.
Several investors prefer holding crypto via ETFs, which offer greater liquidity, security, and simplified regulatory compliance compared to managing the underlying asset directly. Bryan Armour, an ETF analyst at Morningstar, noted that Morgan Stanley’s entry into the crypto ETF market adds legitimacy and could prompt other banks to follow suit. He also suspects that the bank aims to move clients currently investing in Bitcoin into their ETFs, providing them with a fast start despite their later entry into the market.
U.S. banks, which have mostly acted as custodians of client investments, are looking to evolve from cautious facilitators to active advisers. In October, Morgan Stanley expanded access to crypto investments to include all clients and types of accounts. Bank of America followed suit, allowing its wealth advisors to recommend allocations to crypto in client portfolios from January, without any asset threshold.
