One of the world’s largest banks, US Morgan Stanley, plans to offer Bitcoin (BTC)-based financial instruments for its clients in the form of swaps, an anonymous source with access to the bank’s strategies told Bloomberg on Thursday. A bank spokesperson declined to comment on the report, neither confirming nor denying the information.
Morgan Stanley chose the derivatives contract strategy as the institution does not intend for direct BTC trading, according to the source. The bank is technically fully-prepared to offer Bitcoin swaps and will tie them to the BTC futures. Morgan Stanley will officially launch the swaps after institutional investors give signs of significant interests in this offer and after the completion of an internal approval process.
“The U.S. bank will deal in contracts that give investors synthetic exposure to the performance of Bitcoin, said the person, who asked not to be identified because the information is private. Investors will be able to go long or short using the so-called price return swaps, and Morgan Stanley will charge a spread for each transaction, the person said,” Bloomberg explained.
Andrew Peel will allegedly lead the Bitcoin swaps trading. In June, Morgan Stanley hired Peel as head of Digital Asset Markets Division after he left Credit Suisse. Peel worked nearly 12 years as vice president of the Swiss bank giant, according to his LinkedIn profile. He was firstly responsible for derivatives trading for nine years and then took control of sales and innovation for more than two years, with the main focus on digital coins.
“Credit Suisse trading subject matter expert for Bitcoin and cryptocurrencies, client coverage and internal presentations,” Peel explains on LinkedIn.
Moreover, Peel describes himself as crypto markets advocate with interests in cryptocurrencies from 2013.
Morgan Stanley is the latest US bank giant with plans for offering financial services tied with the Bitcoin, which is the largest virtual coin by market capitalization. This week, a report revealed that Citigroup invented a new cryptocurrency investment option with reduced risk. Last month, Goldman Sachs reportedly considered launching custody service for digital coin-based funds.
Alistair Milne, the chief information officer (CIO) of Atlanta Digital Currency Fund said that the US banks Bitcoin activity and the NYSE owner’s plan for physical BTC futures showed there is institutional investor interests in exposure to cryptocurrency, contrary to some skeptical opinions.
Goldman, Citibank, $ICE ... now Morgan Stanley ... all launching Bitcoin products/services because there's no institutional demand /s