Morgan Stanley works with European exchanges to apply crypto technology to traditional market infrastructure Unlike other major banks, Morgan Stanley is not actively researching the crypto asset custody process.
A Bitcoin rally has been in full swing since the last quarter of 2020, but unlike previous cycles, major financial institutions are more closely involved.
Andrew Peel, head of digital asset markets at Morgan Stanley, recently outlined the bank’s crypto journey in an interview.
Peel, who joined the firm in 2018, said Morgan Stanley, known for his financial advisory and investment banking business, is exploring how he can offer customers an exchange product based on bitcoin futures. As a matter of fact, Bloomberg reported that in September 2018 the firm will offer trading in crypto-linked derivatives.
Peel said on the subject:
“Actually, I was appointed to this post in 2018. The first task was to oversee the launch of a swap-based product on bitcoin linked to CME and Cboe futures. In particular, we discussed the view that Bitcoin and crypto will become more of a corporate asset class. There were expectations about how this asset class would evolve at the very end of the retail craze in 2017. Fortunately at the time, senior management at Morgan Stanley had a vision that this space could become not just Bitcoin, but the broader digital asset market, something we should have some expertise on.
In September 2017, Morgan Stanley CEO James Gorman was among the few Wall Street executives who advocated Bitcoin. He said at the time that cryptocurrency was “more than just a fad.”
Ultimately, Morgan Stanley did not release the barter product, but had a number of customer discussions regarding it. Peel said the firm has received more “substantial” attention to Bitcoin from the traditional financial services world since the end of 2020.
What is happening now
As for what’s happening right now, Morgan Stanley is working with regulated European exchanges on how smart contracts and distributed ledger technology can automate certain trading processes and structure specific products, according to a source familiar with the bank’s operations.
Another source said that unlike other major banks such as Goldman Sachs and JPMorgan, Morgan Stanley is not actively researching crypto surveillance.
Ruchir Sharma, Morgan Stanley’s chief global strategist for investment management, wrote in a view published in the Financial Times in early December that Bitcoin is “starting to make progress in its ambitions to change the dollar as a middle stock exchange.”