Morgan Stanley’s subsidiary, E-Trade, is gearing up to enter the world of crypto trading, as reported by The Information on January 2. The move is driven by the anticipation of a more favorable regulatory environment under the incoming administration of President-elect Donald Trump. However, before launching this service, E-Trade would need approval from key regulators, including the Federal Reserve, due to its parent company being a bank holding organization.
In 2020, Morgan Stanley acquired E-Trade, which boasted over 5.2 million accounts and $360 billion in assets under management at the time of acquisition. If E-Trade successfully ventures into crypto trading, it could bring significant capital and legitimacy to the space, potentially attracting more individual and institutional investors.
Notably, Charles Schwab, the largest publicly traded brokerage in the US, has also shown interest in crypto trading. CEO Rick Wurster mentioned in November that Schwab would explore this possibility if regulatory conditions improved. Like E-Trade, Schwab would require approval from the Federal Reserve due to its banking operations.
The potential entry of traditional finance giants into the crypto trading sector reflects the growing mainstream interest in the industry, especially with the prospect of more crypto-friendly regulations. As President Trump appoints individuals supportive of crypto, such as the new US Securities and Exchange Commission Chairman Paul Atkins, the involvement of established institutions could reshape the competitive landscape and attract more capital to the market.
In addition to the participation of traditional finance firms in the crypto market, industry insiders are hopeful for regulatory advancements under the new administration. Expectations include executive orders aimed at simplifying access to banking services and the introduction of new crypto-related products to further enhance institutional interest. Analysts from Bloomberg predict a wave of approvals for new crypto Exchange-Traded Funds (ETFs) this year, indicating a potential surge in institutional investment in the crypto space.