Morgan Stanley's foray into crypto products and services is moving from the fringes into core operations, according to Amy Oldenburg, the bank's head of digital asset strategy.

"There’s an inflection point here," Oldenburg said this week in an interview with GSR. "This is starting to become ... part of the daily business operations."

Oldenburg, who took on the new role in February, oversees digital asset strategy and execution across Morgan Stanley’s institutional wealth and asset management divisions. Her approach looks to integrate crypto and tokenization into the firm’s existing infrastructure rather than treat them as standalone offerings.

"We’ve really come around," Oldenburg said, as crypto, stablecoins, and tokenized assets converge into what she described as "the same ecosystem."

Infrastructure overhaul

To get to that point of harmonization, Morgan Stanley recognizes the need to overhaul and modernize its underlying financial infrastructure. Addressing that, Oldenburg pointed to ongoing work across wallet infrastructure, custody, data feeds, and compliance systems.

"We’re unpacking the workflows to understand how money moves, how the transactions happen, where the obstacles are and where the pain points are," she said.

But that is easier said than done. One of the main challenges is bridging traditional financial systems with blockchain settlement, particularly as regulations around certain components like tokenization and stablecoins are still being cemented.

"You want that digital cash settlement leg to really deliver on the promise and efficiency of tokenization," Oldenburg said. "Right now, we just don’t have all those pieces and regulations all lined up."

Tokenization as a starting point

Although tokenization has been a big focal point for banks and traditional finance firms exploring blockchain, Oldenburg sees it more as a starting point rather than a destination.

"Tokenization is not the goal," she said. "It’s the mechanism that we need to get into to start to build more of the value add that’s out there."

She sees scalability as a constraint in the equation, particularly as infrastructure and client readiness vary across the ecosystem.

"If we can only get 50 or 100 million dollars into a product, it’s going to be tough," Oldenburg said. "There has to be a path to scalability."

Expanding access

To that end, Morgan Stanley has been gradually expanding how clients can access crypto, starting with bitcoin exchange-traded products and now moving toward broader offerings and digital wallets.

“We’re listening to client needs,” she said. “If clients want to buy spot crypto, we’ll offer spot crypto as long as we can from a regulatory perspective.”

Though she said that many investors continue to favor ETFs, which more closely resemble traditional portfolio holdings and are easier to integrate into advisory frameworks.

Oldenburg noted that roughly 80% of crypto ETP activity at Morgan Stanley’s E-Trade platform is still self-directed, highlighting both demand and the need for continued advisor education.

Morgan Stanley's own MSBT bitcoin ETF, which debuted last week, has already topped $100 million in its first six days.

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