Cryptocurrency Is Not Just A Passing Fad: Morgan Stanley CEO
Nicholas Otieno Oct 15, 2021 06:40
Although Morgan Stanley CEO, James Gorman, has revealed that cryptocurrency is not a large part of the bank’s business, he admitted that it is not a fad that will fade away.
The Chief Executive Officer of Morgan Stanley, James Gorman, has stated that crypto assets are not a fad and are not going away.
Mr. Gorman made such remarks in the company’s third-quarter earnings call on Thursday, October 14, after an equity analyst asked him how the bank intends to engage with customers dealing with digital assets.
The CEO responded that Morgan Stanley is not directly trading crypto assets for retail clients but said that, unlike some of its competitors, the investment bank provides clients with access to digital asset purchases through external funds.
"It's just not a huge part of the business demand from our clients, and that may evolve, and we'll evolve with it,"
The investment bank head admitted that “I don’t think crypto is a fad” and added, “I don’t think it’s going to go away. I don’t know what the value of bitcoin should or shouldn’t be, but these things aren’t going away. And the blockchain technology supporting is obviously very real and powerful,”
Mr. Gorman stated that after the bank posted an earnings beat, thanks to a boom performance related to equity trading and investment banking services.
In April, Jonathan Pruzen, the Chief Financial Officer at Morgan Stanley, stated during the bank’s first-quarter earnings calls that “as we see more interest, we’ll work with regulators to provide services we think are appropriate.”
But so far, that interest has still not materialized.
“For us, honestly it’s just not a huge part of the business demand for our clients,” said Mr. Gorman, and further said: “That may evolve and will evolve with it, but certainly it’s not what’s driving our economics one way or the other.”
Mr. Gorman revealed that crypto assets are a working space for the bank and stated that they are respectful and watchful of such assets and see how the regulators handle them.
Bank Clients Invest in Crypto Funds
Morgan Stanly was the first major US bank to provide its clients with access to crypto funds.
In March, the bank succumbed to the demand of its customers to offer the service, and the offering allows eligible customers to have access to three external crypto funds limited to individual investors with at least $2 million or firms with $5 million.
The latest remarks by the Morgan Stanley CEO comes at a time when other major banks also have stayed away from cryptocurrencies amid regulatory uncertainty. Regulators have been struggling to determine how to manage the crypto sector for months now.
Federal Reserve Chairman Jerome Powell recently stated that the US has no plans to ban cryptocurrencies. The US SEC stated that it is creating a regulatory framework for the market.
This week, Jamie Dimon, CEO of JPMorgan investment bank, has called Bitcoin “worthless,” stating that was his personal opinion. Customers of the bank are adults and can make their own decisions to invest in Bitcoin.
JPMorgan bank started offering all its wealth management clients access to cryptocurrency funds in July. The bank’s interest in the cryptocurrency space came as a great surprise, given that the Chief Executive Officer, Jamie Dimon, has consistently shown that Bitcoin is not his interest.
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