Morgan Stanley Pilots Spot Crypto Trading on E*Trade

Morgan Stanley has started a pilot offering spot cryptocurrency trading on its E*Trade retail brokerage platform. The bank is charging a 50-basis-point fee on the dollar value of each crypto transaction. The pilot is live now and the firm expects to open the service to all 8.6 million E*Trade customers later this year.

Jed Finn, head of wealth management at Morgan Stanley, described the initiative as “much bigger than trading crypto at a cheaper rate” and used the phrase “disintermediating the disintermediators” to characterize the effort to change how clients access digital assets.

Morgan Stanley publicly relaxed its stance on crypto late last year, recommending that the most aggressive client portfolios could hold up to 4% in digital assets. Weeks before launching the E*Trade pilot, the bank introduced a low-cost spot bitcoin exchange-traded fund. The fund recorded about $103 million in net inflows in its first six trading days and has grown to more than $200 million in assets.

Eric Balchunas, a senior ETF analyst, compared Morgan Stanley’s 50-basis-point retail trading fee with rival retail fees such as Charles Schwab’s 75 basis points. He noted that bitcoin ETFs can trade at roughly 2 basis points and said direct trading avoids ETF expense ratios, which affects cost comparisons between direct ownership and fund vehicles.

People familiar with Morgan Stanley’s plans said the bank intends to add functionality allowing clients to convert cryptocurrency into shares of exchange-traded products without first selling the digital assets. On the institutional side, the bank plans to enable trading in tokenized equities in the second half of the year.

The bank’s investment unit launched a stablecoin reserves fund last month that is structured to maintain a $1 net asset value by investing in cash and U.S. Treasury instruments with maturities of 93 days or less. The fund was designed to meet proposed reserve requirements under the GENIUS Act.

The pilot runs on the E*Trade platform, extending Morgan Stanley’s digital-asset offerings beyond its private wealth client base. The firm is charging a per-transaction fee rather than embedding costs in an ETF structure. Morgan Stanley will monitor client uptake and adjust pricing and product features as the program expands.