A cartoon image of US President-elect Donald Trump with cryptocurrency tokens, which was photographed in front of the White House to celebrate his inauguration, is displayed at a mineral salt shop in Hong Kong, China, on Monday, January 20, 2025.
Paul Young | Bloomberg | Getty Images
Only days President Donald Trump Second administration, Wall Street is singing a different tune on crypto.
“For us, the equation is about whether we, as… Highly regulated financial institutioncan serve as traditional operations “,” Morgan Stanley CEO Ted Beck He told CNBC On Thursday in World Economic Forum In Davos, Switzerland.
Newfound optimism among a growing number of banking executives who were in Davos this week is linked to Trump's pro-profit agenda. Trump, a vocal encryption skeptic in his first term, I turned over On the issue during his 2024 campaign he came to rely on Crypto industry money In his efforts to defeat former Vice President Kamala Harris.
On Thursday, the President issued a Comprehensive executive order on encryptionwith a focus on “protecting and promoting” the use and development of digital assets. Banks have been reluctant to support crypto and enable transactions to this point in large part because of the government's stance. The SEC has filed more than 200 cryptocurrency-related enforcement actions since 2013, According to Cornerstone Research.
“We will work with Treasury and other regulators to figure out how we can deliver this in a safe way,” Beck said.
Trump has nominated several crypto advocates to critical positions across his administration. They include 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 commerce secretary, and hedge fund manager Scott Bessent has been tapped to lead Treasury.
If confirmed, Bessent will oversee the IRS and the Financial Crimes Enforcement Network, which both play key roles in shaping tax and compliance policies for crypto transactions and preparing guidelines for U.S. crypto adoption in the United States.
Pick says Morgan Stanley is working with federal regulators to determine whether it is possible to deepen the bank's ties with cryptocurrency markets. His firm was more aggressive than its Wall Street peers.
In 2021Morgan Stanley has become the first major US bank to provide its wealthy clients with access to Bitcoin funds. Last August, he was Wall Street's first major player To allow its financial advisors Start placing clients on some of the Bitcoin ETFs that launched early last year. Until now, wealth management firms have only facilitated trades if clients request exposure to new spot crypto funds.
Choice suggested that the more Bitcoin seeps into the mainstream, the more it is seen as a legitimate part of the financial system.
“The longer you trade, the more perception becomes reality,” he said.
“Just another form of payment.”
Bank of America CEO Brian Moynihan He echoed the willingness to embrace crypto, specifically as a payment option, if the regulatory environment shifts under the new administration. Speaking in Davos, Moynihan emphasized that clear guidelines could unlock broader adoption.
“If the rules come along and make it a real thing that you can actually transact with, you will find that the banking system will come hard on the transaction side,” Moynihan said in a statement. Tuesday interview with CNBC.
Moynihan, who runs the second-largest bank by assets in the United States, noted that crypto could become “just another form of payment,” as Visafor MasterCard or apple pays. However, he stayed away from discussing cryptocurrencies like Bitcoin as investments or stores of value, calling it a “separate question.”
Another major barrier to cryptocurrency adoption on Wall Street was an accounting rule, issued by the Securities and Exchange Commission in 2022, requiring banks to classify cryptocurrencies as liabilities on their balance sheets. The rule placed these assets on stringent capital requirements, significantly raising the financial and regulatory risks of offering crypto custody services.
Efforts to repeal the rule, known as SAB 121, gained bipartisan support in Congress last year. but Then-President Joe Biden Vetoes vetoed the proposed legislation, leaving the rule intact and further discouraging banks from adopting digital assets. Banks have been largely banned from expanding their crypto offerings beyond derivatives trading and offering ETFs to wealth management clients.
“Right now, from a regulatory perspective, we cannot own” Bitcoin, Goldman Sachs CEO David Solomon told CNBC in an interview in Davos this week. He said the bank would reconsider the case if the rules changed.
Late Thursday, the SEC Cancel SAB 121, potentially opening the door for banks to custody crypto assets without such onerous capital requirements.
“Bye, bye Saab 121! It was no fun,” wrote SEC Commissioner Hester Peirce, who Tuesday He has been tapped to lead a new “cryptography task force” in A After on x Late Thursday night after the decision.
Bitcoin hit a record $110,000 on Monday ahead of Trump's opening on broader gains in the crypto market. As of midday Friday, it was trading at around $106,000.
– CNBC's son Hugh contributed to this report.
