Morgan Stanley has begun its plans to create a perfect, safe, and legal way for its client to engage in cryptocurrency trading. The bank plans to make this a reality, by providing its clients with a platform which allows them to use complex derivatives to tie trades to Bitcoin. Going by a report from an unidentified anonymous source who is at the heart of it, Morgan Stanley is making this major move in collaboration with other top Wall Street firms.
Morgan Stanley plans on making use of “price return swaps” to achieve its aim. With the price return swap, the bank will be providing its clients with contracts which will only allow them to make trades based on the performance of Bitcoin in the market, and not trade the cryptocurrency directly. This way, clients can make long or short trades based on the direction they believe the Bitcoin price is headed. As a result of its derivative tied digital trades, Morgan Stanley will have the opportunity to charge a spread fee on each trading transaction.
As expected from a top ranking US bank, Morgan Stanley is well prepared and technically equipped to start offering Bitcoin swap trading to its clients. After completing all the necessary steps required for internal approval, and with a sizable demand from its wide client base, the bank plans on launching its specially designed Bitcoin swap trading desk.
It should be noted that a spokesman for the bank has not made any comment in relation to the initiative.
Learn from Goldman Sachs: “Too early to say”
“Too early to say when it will formally launch”, a senior director from Morgan Stanley said, as reported to CryptoPotato. One can be sure that Morgan Stanley is not the only Wall Street bank making a play to allow their clients to trade digital assets. These major banks are making plans to offer complex derivative trading linked to any particular cryptocurrency, with Bitcoin being the number one choice.
Back in May, Goldman Sachs showed interest in opening a crypto trading operation by the end of June, a move which would have made the Goldman Sachs the first Wall Street firm to enter the crypto markets. But just a week ago, according to Goldman Sachs, it is backing off its plans due to the unregulated nature of the cryptocurrency industry coupled with other factors beyond the firm’s control.
The CEO of Morgan Stanley James Gorman made it known earlier this year that the bank’s customers will not be allowed to trade any kind of cryptocurrency directly, but an alternative form of trading desk designed with the sole purpose of supporting numerous derivatives linked to digital currencies will be provided. Going by this, and the recent report, one can conclude that the bank is highly focused on ensuring that this comes to reality as soon as possible.
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