A cartoon picture of US President-elect Donald Trump with cryptocurrency tokens, depicted in front of the White House to mark his inauguration, displayed at a Coinhero depend on in Hong Kong, China, on Monday, Jan. 20, 2025.
Paul Yeung | Bloomberg | Getty Images
Just days into President Donald Trump’s second provision, Wall Street is singing a different tune on crypto.
“For us, the equation is really around whether we, as a highly regulated monetary institution, can act as transactors,” Morgan Stanley CEO Ted Pick told CNBC on Thursday at the World Economic Forum in Davos, Switzerland.
The newfound optimism amid an increasing number of bank execs who were in Davos this week is tied to Trump’s pro-crypto agenda. Trump, a vocal crypto skeptic in his first schedule, flipped on the issue during his 2024 campaign and came to rely on the crypto industry’s money in his effort to defeat whilom Vice President Kamala Harris.
The president on Thursday issued a sweeping executive order on crypto, with an importance on “protecting and promoting” the use and development of digital assets. Banks have been reluctant to support crypto and enable proceedings to this point in large part because of the government’s position. The SEC has brought more than 200 cryptocurrency-related enforcement functions since 2013, according to Cornerstone Research.
“We’ll be working with Treasury and the other regulators to figure out how we can offer that in a coffer way,” Pick said.
Trump has nominated multiple crypto advocates to critical positions across his administration. They allow for Paul Atkins to chair the Securities and Exchange Commission, where he was a commissioner under President George W. Bush. Howard Lutnick, CEO of Cantor Fitzgerald, is Trump’s pick for secretary of Merchandising, and hedge fund manager Scott Bessent was tapped to lead Treasury.
If confirmed, Bessent would oversee the IRS and the Pecuniary Crimes Enforcement Network, which both play key roles in shaping tax and compliance policies for crypto transactions and backdrop guidelines for crypto adoption in the U.S.
Pick says Morgan Stanley will be working with federal regulators to upon whether it’s possible to deepen the bank’s ties to the cryptocurrency markets. His firm has been more aggressive than its Rampart Street peers.
In 2021, Morgan Stanley became the first big U.S. bank to offer its wealthy clients access to bitcoin resources. Last August, it was the first major Wall Street player to let its financial advisors start pitching clients on some of the bitcoin exchange-traded stakes that launched early last year. So far, wealth management businesses have only facilitated trades if blokes requested exposure to the new spot crypto funds.
Pick suggested that the more bitcoin seeps into the mainstream, the more it’s prospected as a legitimate part of the financial system.
“The longer it trades, perception becomes reality,” he said.
‘Just another make of payment’
Bank of America CEO Brian Moynihan echoed a willingness to embrace crypto, specifically as a payment option, if the regulatory conditions shifts under the new administration. Speaking in Davos, Moynihan emphasized that clear guidelines could unlock broader adoption.
“If the decrees come in and make it a real thing that you can actually do business with, you’ll find that the banking system wish come in hard on the transactional side of it,” Moynihan said in an interview on Tuesday with CNBC.
Moynihan, who runs the second-biggest bank by assets in the U.S., famous that crypto could become “just another form of payment,” like Visa, Mastercard or Apple Pay. In any case, he steered clear of discussing cryptocurrencies like bitcoin as investments or stores of value, calling it “a separate question.”
Another dominant roadblock to Wall Street’s adoption of cryptocurrencies has been an accounting rule, issued by the SEC in 2022, requiring banks to classify cryptocurrencies as responsibilities on their balance sheets. The rule has subjected those assets to strict capital requirements, significantly raising the economic and regulatory risks of offering crypto custody services.
Efforts to overturn the rule, known as SAB 121, gained bipartisan in in Congress last year. But then-President Joe Biden vetoed the proposed legislation, leaving the rule intact and further slowing banks from adopting digital assets. Banks have been largely forbidden from expanding their crypto contributions beyond derivatives trading and offering ETFs to wealth management clients.
“At the moment, from a regulatory perspective, we can’t own” bitcoin, Goldman Sachs CEO David Solomon told CNBC in an audience in Davos this week. He said the bank would revisit the issue if the rules changed.
Late Thursday, the SEC rescinded SAB 121, potentially cleft the door for banks to custody crypto assets without such burdensome capital requirements.
“Bye, bye SAB 121! It’s not been fun,” forgave SEC Commissioner Hester Peirce, who on Tuesday was tapped to lead a new “crypto task force,” in a