By Morgan Stanley, a US financial services provider within the banking sector, has assets in excess of $814 billion, with offices in over 42 countries.
Officially, Morgan Stanley’s news on blockchain implementation indicates that the company does not see cryptocurrency and blockchain as being suitable for major banking at this stage of development.
However, an anonymous source reported to Bloomberg Thursday, September 13, that the US banking conglomerate is planning to offer clients Bitcoin trade swaps.
It was reported that Morgan Stanley intends on offering complex derivatives linked to the largest cryptocurrency. Citing “people familiar with the matter,” the publication reveals the U.S. multinational will follow in the footsteps of fellow Wall Street players in pursuing Bitcoin exposure options.
According to the sources, Morgan Stanley “will deal in contracts that give investors synthetic exposure to the performance of Bitcoin.” The plan is that they would partner with other Wall Street firms in creating ways for clients to play the digital currency market. Morgan Stanley will charge a spread for each transaction that an investor makes.
“Investors will be able to go long or short using the so-called price return swaps, and Morgan Stanley will charge a spread for each transaction,” they added.
Once the client demand has proven the plan viable and approval has been attained, the bank will add Bitcoin swap trading to its list of services. The bank does not intend on trading Bitcoin directly, however, they will build a trading desk to support various derivatives tied to digital assets, according to James Gorman, Morgan Stanley’s Chief Executive Officer.
The news marks the latest commitment to Bitcoin interest from Wall Street giant, Goldman Sachs, which refuted claims that it had halted its plans for a Bitcoin trading desk. The price of virtual currencies, including Bitcoin fell, with a total market cap dropping by $12 billion in an hour, after it was announced that they did not want to pursue a crypto-focused unit.
In a discussion with CNBC 6 September, Chavez, Goldman Sachs’ Chief Financial Officer (CFO) reported that the recent reports are nothing more than “fake news”. At the TechCrunch Disrupt Conference, Chavez reportedly said that “I never thought I would hear myself use this term, but I really have to describe that news, as fake news.”
In December last year, it was first reported by Bloomberg that Goldman Sachs planned to establish a crypto-focused unit. A Morgan Stanley spokesperson declined to comment to Bloomberg about the plans.
In addition, to the unconfirmed Morgan plans, the past week has also seen banking giant Citigroup insiders suggest that they are planning an entry into Bitcoin trade products.
Not unlike the potential offerings from Morgan and Goldman, Citigroup’s clients would be able to gain exposure to Bitcoin markets without holding any of the cryptocurrency directly. This concept is known as non-custodial trading. In non-custodial exchanges, the individual trader is liable for securing their money. Contrarily, a custodial exchange would be liable for keeping their clients’ funds secure.
Notable virtual currency figures, Nick Szabo and Andreas Antonopoulos, have criticised the apparent influx of institutional investors via non-custodial methods.
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