Morgan Stanley: Crypto, tokenization enter daily operations

Morgan Stanley is folding crypto, stablecoins and tokenized assets into daily operations while upgrading wallet, custody and settlement systems across its institutional wealth and asset management divisions.

Amy Oldenburg, who took the role of head of digital asset strategy in February, leads the effort to integrate digital assets into existing client workflows rather than treating them as separate products.

The bank is reworking core infrastructure, including wallet services, custody arrangements, data feeds and compliance systems. Teams are mapping workflows to track how money and transactions move and to identify operational obstacles, according to Oldenburg.

Oldenburg described an inflection point for the firm’s crypto activity as these products converge into a single ecosystem. She noted that linking traditional settlement rails with blockchain settlement remains difficult while regulation for tokenization and stablecoins continues to develop. A reliable digital cash settlement leg is needed to deliver the efficiency tokenization promises, she said.

Scalability is a constraint for new products. Oldenburg warned that offerings drawing only $50 million to $100 million in assets will face a harder path to growth without a clear route to larger capital flows.

Morgan Stanley has expanded client access in stages, beginning with bitcoin exchange-traded products and adding digital wallets and other offerings. About 80% of crypto ETP activity on the bank’s E-Trade platform is self-directed, a sign of client demand and a continuing need for advisor education.

The bank’s MSBT bitcoin ETF recorded more than $100 million in investor flows in its first six days after launch.