E-Trade, the crypto subsidiary of Morgan Stanley, is preparing to offer crypto trading. The information reported on January 2 citing two people familiar with the plans.
According to the report, the lender’s move is motivated by anticipation of a more favorable regulatory environment under the incoming administration of President-elect Donald Trump.
However, before E-Trade can launch such a service, it will need approval from major regulators, including the Federal Reserve. The parent company is a bank holding organization and therefore falls under the supervision of the central bank.
Morgan Stanley acquired E-Trade in 2020. At the time of the acquisition, it had more than 5.2 million accounts and $360 billion in assets under management.
Morgan Stanley’s entry into the crypto trading would bring significant capital and legitimacy to the space, potentially encouraging greater participation from individual and institutional investors.
Notably, Charles Schwab, the largest publicly traded brokerage in the US, has done just that shown interest in the field of crypto trading.
In November, CEO Rick Wurster indicated that Schwab would explore the possibility if regulations improved. Like E-Trade, Schwab would need Federal Reserve approval because of its banking activities.
If these companies were to receive the necessary approvals, the crypto market could see a wave of new entrants and increased competition, challenging established players and bridging the gap between traditional and digital finance.
Crypto Optimism in the US
The possible launch of crypto trading services by traditional financial giants underlines the mainstream interest in this sector as regulations could become friendlier.
As Trump Nominates Crypto-Friendly Names for His Team, like the new chairman of the US Securities and Exchange Commission, Paul Atkins, the involvement of established institutions could reshape the competitive landscape while attracting more capital to the market.
In addition to traditional financial companies joining the crypto market, there are also industry players heap for regulatory moves on Trump’s first day. Executive orders to make access to banking services easier are expected.
Furthermore, new crypto-related products could appear on the markets, further increasing institutional interest. Bloomberg exchange-traded fund (ETF) analysts Eric Balchunas and James Seyffart expect one wave of approvals for new crypto ETFs this year.