President Trump's turnaround on cryptocurrencies is moving them more into the mainstream, with two leading Wall Street brokerages now planning to introduce a wider range of customers to digital assets.
Morgan Stanley is preparing to let clients trade bitcoin and ether — two of the most popular tokens — through its E*Trade platform beginning next year, Bloomberg reports. The brokerage's competitor, Charles Schwab Corp., said Thursday it has similar plans.
Morgan Stanley has offered crypto trading to wealthy clients through ETFs and derivatives, but its new plan would allow everyday investors to directly buy and sell digital assets.
This would be a significant shift from previous years, when banks limited their relationship with crypto or avoided it altogether.
Crypto critics say it's too unregulated, volatile and prone to security issues and fraud to be safe for users. In 2023, U.S. banking regulators warned traditional financial institutions of "key risks associated with crypto-assets."
"Issuing or holding as principal crypto-assets that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices," according to the joint statement from the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
The three regulators withdrew the guidance last week, in part "to further support innovation in the banking system," the Fed said.
Even Trump was a skeptic in his first term. "I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air," he posted on X in 2019. "Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity."
He changed course during the 2024 campaign, accepting donations from the industry, selling digital trading cards and pledging to make America the "crypto capital of the planet."
Since he took office in January, he has reversed a Biden-era crackdown on the industry and ratcheted up his own crypto business.
Federal agencies charged with investigating crypto firms and enforcing rules have been stripped, and cases against top crypto firms including Coinbase, Ripple and others have been dropped.
Trump has hawked meme coins featuring him and wife Melania, promoted a crypto business with his sons, proposed a U.S. "strategic crypto reserve," issued an executive order supporting crypto, created a task force to set up a regulatory framework and appointed a crypto advocate as head of the regulatory agency that oversees the industry.
Trump Media & Technology is looking to offer bitcoin exchange-traded funds as part of Truth.Fi, its new financial services firm. On Thursday, The New York Times reported that a fund backed by Abu Dhabi would be making a $2 billion business deal using digital coins from a separate Trump family crypto business.
And on Wednesday, Trump's son Eric, executive vice president of the Trump Organization, told CNBC the traditional banking system is "antiquated" — an opinion shared by many in the crypto community.
"I’m telling you, if the banks don’t watch what’s coming, they’re going to be extinct in 10 years," Eric Trump said, per CNBC.
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