Morgan Stanley gets preliminary approval for in-house crypto services, pressuring specialists

Morgan Stanley has cleared a major regulatory hurdle to bring digital asset custody, staking, and lending support entirely in-house. The Office of the Comptroller of the Currency granted preliminary conditional approval in June for the bank to establish a national trust bank for digital assets, according to the public application.

The proposed subsidiary, Morgan Stanley Digital Trust, would operate as a wholly owned national trust bank. That structure gives the Wall Street giant a regulated vehicle to handle functions that have typically been outsourced to specialist crypto-native firms. The approved services cover custody of assets, transaction administration – purchases, sales, swaps, and transfers – fiduciary staking, and collateral administration to support affiliate digital-asset lending.

If the trust bank receives final approval and is implemented, Morgan Stanley will be able to keep those functions inside its own group. That concentration of services puts crypto-native intermediaries under fresh pressure. Third-party custodians, staking administrators, and collateral-service providers face the clearest exposure where their products overlap with the trust bank's approved functions. Fewer handoffs between separate teams could also make outside firms less central to client relationships and daily operational workflows.

The move does not cover every layer of digital asset services, however. Access to execution venues, trading liquidity, lending counterparties, validator operation, and broader blockchain infrastructure still require separate relationships and implementation choices. The OCC filing defines what Morgan Stanley wants to keep inside the bank; outside firms can continue handling the rest.

The approval comes with strict capital requirements. Morgan Stanley Digital Trust must hold at least $50 million in Tier 1 capital, maintain a set pool of liquid assets, and have sufficient liquidity to meet the OCC's standards. The application record classifies the filing as a new bank charter under a holding company with trust powers.

This marks a significant step in Wall Street's deeper integration with digital assets. Unlike banks that rely on third-party custodians like Coinbase or BitGo, Morgan Stanley is building the infrastructure under a federal banking charter. The structure could set a precedent for other large banks exploring similar trust vehicles.

What to watch: The timeline for final OCC approval and implementation remains unclear. Morgan Stanley must meet all conditions and pass a final review before the trust bank goes live. If approved, the bank could begin offering these services to its wealth management clients, reducing reliance on external crypto intermediaries.