In this photo illustration, the logo for E-Trade, the online trading platform owned by Morgan Stanley, is shown on the company’s website on May 13, 2024 in Chicago, Illinois.
Scott Olson | Getty Images
Morgan Stanley is months away from offering crypto trading to retail customers through its E-Trade division as the Wall Street giant embraces what it called a transformative moment for the wealth management industry.
The firm is working with the startup Zerohash — which Morgan Stanley also took an investment stake in — for liquidity, custody and settlement around crypto trading, according to a memo obtained by CNBC.
“We are well underway in preparing to offer crypto trading through a partner model to E-Trade clients in the first half of 2026,” Jed Finn, head of wealth management at Morgan Stanley, said in the memo.
Morgan Stanley is among the most aggressive of big banks in embracing crypto after the U.S. government’s stance towards the technology flipped with the election of President Donald Trump. Wealth management accounted for nearly half of Morgan Stanley’s total revenue last year, making it more reliant on the industry than its other big bank peers.
The move is the latest sign of crypto adoption by financial incumbents. In an earlier wave about four years ago, banks including Morgan Stanley and Goldman Sachs began offering bitcoin funds to their wealthy clients. That gave clients exposure to the asset class though crypto firms including Galaxy Digital that managed the funds.
But what Morgan Stanley is doing now is offering direct ownership of crypto, which cuts out third-party management fees and comes with greater risks. Morgan Stanley will first offer Bitcoin, Ether and Solana trading, according to Bloomberg News.
Morgan Stanley is preparing for a future in which wealthy clients expect to see traditional and digital assets managed in the same environment, Finn said in the memo.
The bank is working on a “robust wallet infrastructure” that will allow it to be the custodian of digital assets for it clients, a key part of its strategy, he said.
“Offering clients the ability to trade crypto is the tip of the iceberg,” he said.
The bank expects to help clients hold not just crypto, but also tokenized versions of traditional financial assets, according to the memo.
Tokenization — or creating a digital representation of assets including cash, stocks, bonds and real estate on a blockchain — will “significantly disrupt” the wealth management industry, Finn said.
“Tokenized substitutes for cash begin paying interest as soon as it hits the wallet,” Finn said. “The rest of the asset classes will follow suit in seeking this efficiency.”
“We see immense power in the cryptocurrency space, not just with crypto as an investment for our clients, but also around DLT and tokenization more broadly,” he said, using the acronym for distributed ledger technology, the concept underpinning blockchain.
