Morgan Stanley is reportedly preparing to bring direct cryptocurrency trading to its E*Trade platform, a move that would mark a notable expansion of digital asset access for retail brokerage clients. According to Bloomberg, citing people familiar with the matter, the feature is still under development but could launch as early as next year. If introduced, customers may be able to trade leading cryptocurrencies such as bitcoin and ether directly through the platform.
The reported plan reflects a broader shift in how major Wall Street firms are approaching crypto exposure. For years, many large financial institutions limited their involvement to indirect products, including exchange-traded funds, futures contracts, and trust structures. A direct spot trading service on E*Trade would move beyond that model and potentially place Morgan Stanley among the largest traditional US financial institutions offering retail clients direct access to digital assets.
Infrastructure and Partnerships Still Under Review
The report said Morgan Stanley executives are currently assessing the technical and operational requirements needed to support such a launch. That includes evaluating infrastructure needs and considering possible partnerships with established crypto-native firms. This detail is significant because spot trading requires more than front-end order routing: firms also need to address asset custody, liquidity sourcing, trade execution, compliance controls, and customer risk management.
If Morgan Stanley proceeds, the service could become one of the most substantial direct crypto retail offerings by a US systemically important financial institution. That would represent a meaningful step in the convergence of traditional finance and digital asset markets, particularly at a time when brokerages are looking for new ways to capture investor demand without relying solely on third-party crypto exchanges.
Policy Reversals Changed the Competitive Landscape
A central reason this initiative appears more viable now is the sharp change in the US regulatory climate. The report highlights that digital asset policy has shifted in a more favorable direction following regulatory reversals under the Trump administration. One major early action in 2025 was the repeal of SAB 121 by the US Securities and Exchange Commission. That move removed capital-related constraints that had previously discouraged many institutions from becoming more active in crypto custody.
In parallel, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency rescinded prior guidance related to digital assets. Together, these actions effectively reopened the door for traditional financial firms to revisit crypto strategies with fewer regulatory obstacles than before. For large brokerages and banks, the policy shift may reduce uncertainty around whether and how they can support digital asset services at scale.
Government Actions Extended Beyond Deregulation
The report also notes that Washington’s new posture has gone beyond simply removing restrictions. In March, the administration established a US Strategic Bitcoin Reserve through an executive order, consolidating bitcoin seized through federal enforcement actions. A parallel directive created a Digital Asset Stockpile under Treasury oversight for non-bitcoin crypto assets, including ether, solana, XRP, and cardano.
At the same time, several agency leadership changes reinforced the market’s view that the federal government was adopting a more permissive approach. The administration installed deregulatory appointees, including Paul S. Atkins at the SEC, and moved to end ongoing enforcement actions against companies such as Coinbase and Ripple. Supporters see these changes as a way to let innovation and market competition advance more freely. Critics, however, argue that the rollback of oversight could increase systemic risk and encourage regulatory capture.
E*Trade’s Crypto Exposure Has So Far Been Indirect
Until now, E*Trade’s crypto offering has been limited to instruments that provide indirect exposure. These include CME bitcoin futures, spot and futures-based crypto ETFs, and crypto asset trusts. Such products allow investors to track price movements, but they generally do not offer direct ownership of the underlying tokens, physical settlement, or on-chain custody capabilities.
That distinction matters. A spot trading rollout would give E*Trade users a more direct relationship with crypto markets than the brokerage has previously provided. It could also expand the competitive field by putting a major legacy brokerage in closer competition with incumbent crypto exchanges, particularly on pricing, execution quality, and user trust. For many retail investors, trading digital assets inside an established brokerage account may feel operationally simpler and institutionally safer than moving assets to a standalone crypto platform.
Why the Market Is Watching Closely
The significance of Morgan Stanley’s reported plan goes beyond one product launch. It suggests that traditional finance may be entering a new phase of crypto engagement, shaped not only by customer demand but also by a policy environment that is materially more accommodating than in prior years. If a firm of Morgan Stanley’s scale is willing to consider direct retail spot trading, other banks and brokerages may reassess their own plans.
For now, the project remains under development, and no final launch date has been confirmed beyond the indication that it could arrive next year. Still, the direction is clear: as US regulators ease earlier restrictions and major institutions revisit their digital asset strategies, the line between mainstream brokerage services and crypto-native market access appears to be narrowing. Whether that ultimately accelerates broader adoption or introduces fresh risks, Morgan Stanley’s next move on E*Trade is likely to be watched closely across both Wall Street and the crypto industry.