Morgan Stanley has filed applications with U.S. regulators seeking approval to introduce exchange-traded funds (ETFs) linked to Bitcoin and Solana, marking a significant step in the growing integration of digital assets into mainstream finance. If approved, the move would position the investment bank as the first major U.S. banking institution to directly issue ETFs tied to cryptocurrencies, underscoring a broader shift in how traditional financial firms engage with the sector.
According to filings submitted to the U.S. Securities and Exchange Commission (SEC) and first reported by Reuters, the proposed ETFs would track the market prices of Bitcoin and Solana, two of the most prominent digital assets globally. The initiative signals Morgan Stanley’s intention to expand beyond advisory and custodial roles into the direct issuance of crypto-linked investment products.
The development comes amid a changing regulatory climate in the United States, where clearer policy direction has encouraged established financial institutions to revisit opportunities in digital assets. Under President Donald Trump’s administration, regulatory agencies have taken steps that appear more accommodating toward cryptocurrencies, helping to reduce uncertainty that previously kept large banks on the sidelines.
In December, the U.S. Office of the Comptroller of the Currency (OCC) issued guidance allowing banks to serve as intermediaries in cryptocurrency transactions. That decision narrowed the long-standing divide between traditional finance and the digital asset ecosystem, enabling banks to play a more active role in crypto-related services.
Details from the regulatory filings
The proposed ETFs are designed to provide investors with exposure to cryptocurrencies without requiring them to directly own or manage digital tokens. Instead, investors would gain access through regulated financial instruments traded on traditional exchanges, a structure that analysts say appeals to both institutional and retail investors seeking greater transparency and risk mitigation.
Bryan Armour, an ETF analyst at Morningstar, noted that Morgan Stanley’s entry into crypto ETFs reflects strategic positioning rather than experimentation. He suggested the bank may aim to transition existing clients who already hold Bitcoin exposure into its own ETF products, allowing it to gain traction quickly despite entering a market that has been dominated by asset managers.
Armour added that the participation of a globally recognised bank could further legitimise cryptocurrencies as an asset class and prompt additional banks to follow suit. Since the SEC approved the first spot Bitcoin ETF in the U.S. two years ago, non-bank asset managers have largely controlled the space. However, recent developments suggest that large banks are now prepared to compete more directly.
Morgan Stanley has already taken steps to widen access to crypto investments. In October, the bank expanded crypto availability across all client types and account categories. Bank of America followed a similar path in January, allowing its wealth advisers to recommend crypto allocations without minimum asset thresholds, highlighting a growing acceptance of digital assets among traditional wealth management firms.
Broader implications for emerging markets
While the proposed ETFs are focused on the U.S. market, the development has implications for countries such as Nigeria, which remains one of the most active cryptocurrency markets globally. Nigeria’s strong crypto adoption has been driven by a young population, demand for cross-border payments, and persistent foreign exchange challenges.
However, Nigeria’s regulatory stance on digital assets has evolved over time. In 2021, the Central Bank of Nigeria (CBN) prohibited banks from facilitating cryptocurrency transactions, pushing most activity onto peer-to-peer platforms. That approach began to shift in late 2023, when the CBN introduced new guidelines allowing banks to open and operate accounts for Virtual Asset Service Providers (VASPs), subject to strict compliance measures.
The Securities and Exchange Commission (SEC) Nigeria has also taken steps to formalise the sector, issuing rules covering digital asset issuance, exchange operations, and custody. In August 2024, the SEC granted approval-in-principle to Quidax and Busha, recognising them as legally compliant crypto exchanges in the country.
Despite these regulatory advancements, crypto-linked investment products such as ETFs are not yet available within Nigeria’s capital market. Regulators continue to emphasise investor protection, anti-money laundering controls, and systemic risk management as they assess the long-term role of digital assets in the financial system.
Morgan Stanley’s push into Bitcoin and Solana ETFs highlights how global financial institutions are increasingly positioning themselves for a future where cryptocurrencies play a more established role in investment portfolios, potentially reshaping both developed and emerging financial markets.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
