Morgan Stanley to Add Crypto Trading on E*Trade as Fed Eases Restrictions

Morgan Stanley is preparing to offer cryptocurrency trading on its E*Trade platform. This would be the most direct move so far by a major US bank to let retail users buy and sell digital assets.

The move comes amid regulatory changes in the United States. On Thursday, the Federal Reserve officially removed two supervisory letters that had discouraged banks from engaging in crypto-related activities. The change means state member banks no longer need to notify the Fed in advance of planned or current crypto-asset activities. These will now be reviewed through the standard supervisory process.

Crypto Trading Coming to E*Trade

The plan is still in its early stages. According to Bloomberg, the launch may take place next year. The bank is exploring partnerships with crypto-native firms to support the technical side of the trading system.

Morgan Stanley already offers some crypto-related products, such as ETFs, options, and futures. These are aimed at wealthier clients. The new plan would expand access to a broader group of users.

JUST IN: 🇺🇸 $1.5 trillion Morgan Stanley to offer #Bitcoin and crypto trading to E-Trade clients. pic.twitter.com/8wWuJgovrs

Trump Era Sparks Renewed Crypto Interest

Internal talks reportedly gained momentum after Donald Trump returned to the White House last year. His administration began reversing several crypto-related regulations. That has encouraged some financial institutions to reconsider their approach to the sector.

If Morgan Stanley proceeds, it could increase pressure on crypto-focused platforms like Coinbase and Kraken. These firms currently serve a large share of the retail market.

Other financial companies are also moving toward crypto. Charles Schwab has shown interest in offering spot trading. SoFi is also reviewing its crypto plans. It says the U.S. market has undergone a fundamental change.

You may find it interesting at FinanceMagnates.com: Morgan Stanley Hit With $15 Million SEC Fine Over Client Fund Theft.

E*Trade's New Platform Targets Active Traders

Meanwhile, E*Trade is introducing a new platform called "Power ETrade Pro" aimed at active traders. Currently in its pilot phase, the platform is scheduled for a full launch in June, according to Bloomberg.

The new platform will compete with services like Charles Schwab’s Thinkorswim and Robinhood’s Legend, offering customization of up to 120 tools across six screens. It will also include a separate desktop client in addition to existing web and mobile options.

Morgan Stanley acquired E*Trade in October 2020 for $13 billion, expanding its wealth management services and adding over 5 million retail client accounts.