Morgan Stanley is preparing to roll out crypto trading on its E*Trade platform next year, in what would be the most aggressive move yet by a big American bank to let regular people buy coins like Bitcoin and Ether. The development was reported by Bloomberg, and people at the company say it’s still early, but serious. The firm wants to partner with one or maybe even more crypto companies to handle the technical side, from custody to execution, so E*Trade customers can buy crypto directly. The project began taking shape inside Morgan Stanley late last year, when executives started pushing harder to go beyond crypto futures and ETFs. Right now, wealthy clients can already access things like Bitcoin ETFs and derivatives through the firm. But management decided that wasn’t enough. They wanted retail users to be able to buy real coins, not just products tied to them. Once the tech and partnerships are in place, E*Trade users will be able to trade crypto directly from the same platform they use for stocks and options. Trump’s crypto policies cleared the path The plan follows a major change in US crypto policy by President Donald Trump. Once in office, he signed an executive order telling regulators to support digital finance and protect individual liberty. That same day, the Securities and Exchange Commission canceled a set of rules that crypto firms said had made it hard to work with banks. A week ago, the Federal Reserve and the FDIC took things even further by dropping their 2023 warnings about crypto-related banking risks. That move was immediately praised by the Bank Policy Institute, a group that represents big lenders. In a statement, Paige Pidano Paridon, co-head of regulatory affairs at the BPI, said, “It empowers regulated financial institutions to better serve their customers safely and invest in innovative new products and services.” Before Trump returned to the White House, most big banks avoided crypto altogether. They didn’t want to get burned by hacks, scams, or another FTX-style collapse. Some banks even avoided taking deposits from crypto companies. There was also a long list of internal critics in the finance world. One of the loudest was Jamie Dimon, CEO of JPMorgan Chase. Over the years, Jamie called Bitcoin “worthless,” “a fraud,” and even “a pet rock.” But last year, he told reporters, “I defend your right to do Bitcoin,” and JPMorgan now works with crypto exchanges like Coinbase and runs its own JPM Coin on blockchain rails. Morgan Stanley joins an active crypto offering space Morgan Stanley’s former CEO James Gorman spoke up earlier than most. Back in 2017, James said Bitcoin was “more than just a fad.” The firm still didn’t go all in at the time, but now it’s finally pushing into real trading. This would put it in direct competition with Robinhood and Coinbase, which have owned the US crypto trading space for years. Robinhood, for example, made $626 million from crypto in 2024 alone. That was 21% of its total revenue. After Trump’s win, Robinhood’s first quarter profit more than doubled. If Morgan Stanley succeeds, it could pull some of those customers away. The name brand, along with tighter regulation and security, might appeal to people who’ve been waiting for crypto to feel more legitimate. That’s bad news for existing platforms that are already losing users or fighting lawsuits. The race is getting crowded fast. After Trump won, Charles Schwab’s new CEO Rick Wurster said his company will add spot crypto trading as soon as regulations are clear. And this week, Anthony Noto, CEO of SoFi Technologies , said the firm might bring back crypto investing. SoFi pulled out of crypto in 2023 but could re-enter the market if rules stay favorable. The SEC also gave a “non-objection” to a plan by Bank of New York Mellon to custody crypto. That means the agency doesn’t see any rule-breaking in the way BNY wants to do it. Gary Gensler, who was SEC Chair under Joe Biden, said BNY had “done the legwork” to meet requirements. The bank’s still a rare case, but it shows how things are moving. Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now
