Morgan Stanley Division Considering Crypto Trading Services Amid Positive Regulatory Outlook

E-Trade, a crypto subsidiary of Morgan Stanley, is setting the stage to roll out crypto trading services,

as highlighted by The Information
on Jan. 2, according to sources in the know.

The firm is reportedly spurred by the expectation of a crypto-friendly climate under the upcoming administration of President-elect

Donald Trump.

Still, E-Trade must secure the nod from key regulators, such as the Federal Reserve, before it can launch this service, given that it is part of a bank holding company under the Fed’s purview.

Morgan Stanley brought E-Trade under its wing in 2020, which at that point managed over 5.2 million accounts and held $360 billion in customer assets.

Should Morgan Stanley make its foray into crypto trading, it could inject substantial capital and credibility into the domain, potentially attracting more retail and institutional investors.

In a similar vein,
Charles Schwab has also indicated an interest in offering crypto trading services.

CEO Rick Wurster of Schwab mentioned in November that the firm is considering crypto trading if regulatory landscapes become more conducive. Schwab, like E-Trade, would also require Federal Reserve approval due to its banking functions.

The entrance of these financial behemoths into the crypto arena could usher in a surge of newcomers and intensify competition, merging conventional financial systems with the evolving digital economy.

Crypto Optimism in the United States

The prospective introduction of crypto trading by established financial entities underscores the sector’s burgeoning appeal as regulatory attitudes may shift to become more accommodating.

As Trump appoints individuals with pro-crypto leanings to his team, like new SEC Chairman Paul Atkins, traditional institutions gearing up for crypto involvement could redefine the competitive market and accelerate capital flows into the crypto economy.

Beyond just traditional financial institutions, industry insiders are hopeful for proactive regulatory actions from day one under Trump. They are anticipating measures to ease banking services for crypto operations.

Furthermore, market anticipation is high for new cryptocurrency-related financial products. Bloomberg ETF analysts Eric Balchunas and James Seyffart postulate the likely approval of new crypto ETFs this upcoming year.

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