A Coinhero store in Hong Kong, China, displays a cartoon image of U.S. President-elect Donald Trump with cryptocurrency tokens in front of the White House on Monday, January 20, 2025, to mark his inauguration.
Paul Yang | Bloomberg | Getty Images
just the first few days President Donald Trump’s After the second administration, Wall Street sang a different tune when it came to cryptocurrencies.
“For us, the question really is whether we act as a Strictly regulated financial institutionscan act as a trader,” Morgan Stanley CEO Ted Peake told CNBC Thursday at world economic forum In Davos, Switzerland.
Newfound optimism among a growing number of bank executives in Davos this week has been linked to President Trump’s pro-cryptocurrency agenda. Trump was an outspoken skeptic of cryptocurrencies during his first term. flip He has made recommendations on the issue during the 2024 campaign and has come to rely on crypto industry money He worked hard to defeat former Vice President Kamala Harris.
The president issued a Comprehensive Executive Order on Cryptocurrenciesfocusing on “protecting and promoting” the use and development of digital assets. Banks have so far been reluctant to support cryptocurrencies and enable transactions, largely because of the government’s stance. Since 2013, the SEC has taken more than 200 cryptocurrency-related enforcement actions, Based on Cornerstone Research.
“We will work with the Treasury and other regulators to figure out how to provide this service in a safe way,” Peake said.
Trump has nominated several cryptocurrency advocates to key positions in the government. Among them is SEC Chairman Paul Atkins, who served on the commission under President George W. Bush. Cantor Fitzgerald CEO Howard Lutnick was nominated by Trump to be Commerce Secretary, and hedge fund manager Scott Bessent was appointed Treasury Secretary.
If confirmed, Bessent will oversee the IRS and Financial Crimes Enforcement Network, two agencies that play key roles in setting tax and compliance policies for cryptocurrency transactions and developing guidelines for U.S. cryptocurrency adoption
Peake said Morgan Stanley will work with federal regulators to determine whether it is possible to deepen the bank’s ties to the cryptocurrency market. His firm is more aggressive than its Wall Street peers.
2021Morgan Stanley becomes the first major U.S. bank to offer Bitcoin funds to wealthy clients. final Augustwhich was the first major Wall Street player Get a financial advisor began marketing to customers some of the Bitcoin exchange-traded funds it launched early last year. Until now, wealth managers have only facilitated trading when clients requested access to new spot cryptocurrency funds.
Peake said the further Bitcoin moves into the mainstream, the more it will be seen as a legitimate part of the financial system.
“The longer you trade, the more perceptions become reality,” he said.
“Just another payment method”
Bank of America CEO Brian Moynihan They are open to accepting cryptocurrencies, especially as a payment option, if the regulatory environment changes under the new administration. Speaking in Davos, Moynihan stressed that clear guidelines could spur wider adoption.
“If the rules come in and make it something that you can actually do business with, you’re going to find that the banking system will play a role in terms of transactions,” Moynihan said in a statement. Interview with CNBC on Tuesday.
Moynihan, who runs the second-largest U.S. bank by assets, noted that cryptocurrencies could become “another form of payment,” such as visa, MasterCard or apple Pay. However, he avoided discussing cryptocurrencies such as Bitcoin as an investment or store of value, calling it “a separate issue.”
Another major obstacle to Wall Street’s adoption of cryptocurrencies is the SEC’s 2022 accounting rules that would require banks to classify cryptocurrencies as liabilities on their balance sheets. The rule subjects these assets to strict capital requirements, significantly raising the financial and regulatory risks of providing cryptocurrency custody services.
Last year, an effort to overturn the rule, known as SAB 121, gained bipartisan support in Congress. but then-President Biden vetoed the proposed legislation, keeping the rule in place and further preventing banks from adopting digital assets. Banks are largely prohibited from expanding their cryptocurrency offerings beyond derivatives trading and offering ETFs to wealth management clients.
“Right now, from a regulatory perspective, we can’t own” Bitcoin, Goldman Sachs CEO David Solomon said this week in an interview with CNBC in Davos. He said the bank would reconsider the issue if the rules were changed.
With the pro-cryptocurrency Trump administration taking office, there is renewed optimism that SAB 121 may be repealed or revised, allowing banks to custody crypto assets without such onerous capital requirements.
Bitcoin hit an all-time high of nearly $110,000 on Monday ahead of Trump’s inauguration, leading a broader rally in cryptocurrency markets. As of Thursday evening, it was trading around $104,000.
— CNBC’s Hugh Son contributed to this report.
