“We Won’t Stop at Bitcoin”: Morgan Stanley Considers Tokenization and Tax Solutions in Cryptocurrency Payments

The first appearance of the Morgan Stanley spot Bitcoin The ETF marked a milestone Wednesday for the investment bank as client assets reached $9.3 trillion, but the financial powerhouse is already considering what could be next when it comes to cryptocurrencies.

The company filed applications in January to track exchange-traded funds Ethereum and SolanaAmy Oldenburg, head of digital asset strategy at Morgan Stanley, said it was doubtful the company would stop there. Decryption In an interview this week.

“We’re not going to stop at just Bitcoin,” she said, referring to Morgan Stanley’s Bitcoin exchange-traded fund, which has generated nearly $46 million in net inflows since its debut on Wednesday, according to Farside Investors. “It’s really about the long journey, and there’s a long way to go.”

Last year, Morgan Stanley became the first major firm to allow its army of more than 15,000 wealth advisors to offer third-party Bitcoin ETFs to qualified clients, Green lighting Products offered by asset managers Fidelity and BlackRock. Oldenburg said Morgan Stanley’s next moves may resemble steps taken by those rivals.

She described A symbolic A money market fund is “definitely a way forward” for Morgan Stanley’s product roadmap, highlighting opportunities across other asset classes that the investment bank can exploit to create digital representations of real assets.

Franklin Templeton pioneered the format of yield tokens backed by US Treasuries in 2021, but that asset manager’s product has since been replaced by BlackRock’s BUIDL, which has grown to $2.3 billion, according to RWA.xyz. Meanwhile, Fidelity’s digital interest token received a total value of about $172 million.

Parametric, a subsidiary of Morgan Stanley, has created a large number of rules-based investment strategies for clients, including Tax loss harvesting. Helping clients offset capital gains tax liabilities with digital assets is “something to explore as well,” Oldenburg said.

The investment bank has already sent further steps: last year Confirmed plans To offer cryptocurrency trading via E*TRADE in collaboration with infrastructure provider Zerohash. In February, Oldenburg He said Bitcoin-based yield and lending services are also being explored.

Morgan Stanley’s Bitcoin Trust may have a hard time growing beyond its $53 billion Bitcoin exchange-traded fund, but it will have a hard time doing so. You are likely to apply pressure About the industry-leading alternative, said Eric Balchunas, senior analyst at Bloomberg Funds Decryption this week.

Aside from Morgan Stanley’s ability to drive internal distribution, Balchunas pointed to the product’s cost ratio. He said undercutting most competitors with 0.14% fees was a big step inside the “terror” of asset managers vying to make products cheap.

Oldenburg noted that fee compression is not a new concept for Morgan Stanley, and over time, the newly launched ETF will likely serve as a trading path.

“We had the opportunity to really focus on how efficiently we could deliver this product from a fees perspective, and not make it just about making money,” she said. “Now, let’s see some more interesting products continue to develop around that.”