Trump’s cryptocurrency plans have Wall Street executives excited about digital assets

Only days later President Donald Trump In the second administration, Wall Street is singing a different tune on cryptocurrencies.

“For us, the equation is about whether we, as a country Highly regulated financial institution,can act as transactions,” Morgan Stanley CEO Ted Beck He told CNBC On Thursday in World Economic Forum In Davos, Switzerland.

Newfound optimism among a growing number of bank executives who were in Davos this week is tied to Trump’s pro-crypto agenda. Trump, an outspoken cryptocurrency skeptic in his first term, I turned over On this issue during his 2024 election campaign and relied on Crypto industry money In his attempt to defeat former Vice President Kamala Harris.

On Thursday, the President issued a Comprehensive Executive Order on CryptocurrenciesWith a focus on “protecting and promoting” the use and development of digital assets. Banks have been reluctant to support cryptocurrencies and enable transactions up to this point due to the government’s stance. The SEC has taken more than 200 enforcement actions related to cryptocurrencies since 2013, According to Cornerstone research.

“We will be working with the Treasury Department and other regulators to figure out how we can deliver this in a safe way,” Beck said.

Trump has nominated several cryptocurrency advocates to important positions in his administration. Among them is Paul Atkins, who will 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 choice for Commerce Secretary, and hedge fund manager Scott Besent has been tapped to lead the Treasury Department.

If approved, Besant will oversee the IRS and Financial Crimes Enforcement Network, both of which play key roles in shaping tax and compliance policies for cryptocurrency transactions and setting guidelines for cryptocurrency adoption in the United States.

Beck says Morgan Stanley will work with federal regulators to determine whether the bank’s ties to cryptocurrency markets can be deepened. His company was more aggressive than its Wall Street counterparts.

In 2021Morgan Stanley has become the first major US bank to offer its wealthy clients access to Bitcoin funds. Last August, he was Wall Street’s first major player To allow its financial advisors Beginning to offer clients some of the Bitcoin exchange-traded funds that launched early last year. Until now, wealth management firms have only facilitated trades if clients request exposure to new spot crypto funds.

The more Bitcoin seeps into the mainstream, the more it will be seen as a legitimate part of the financial system, Beck suggested.

“The longer the trading period goes on, the more the perception becomes reality,” he said.

Bank of America CEO Brian Moynihan He echoed the desire to embrace cryptocurrencies, specifically as a payment option, if the regulatory environment changes under the new administration. Speaking in Davos, Moynihan emphasized that clear guidelines could open the door to broader adoption.

“If the rules came in and made it a real thing that you could actually deal with, you would find that the banking system would struggle with the transactional side of it,” Moynihan said in his report. Tuesday interview with CNBC.

Moynihan, who runs the second-largest bank by assets in the United States, noted that cryptocurrencies could become “just another form of payment,” such as… Visa, 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 Wall Street’s adoption of cryptocurrencies is an accounting rule, issued by the Securities and Exchange Commission in 2022, that requires banks to classify cryptocurrencies as liabilities on their balance sheets. This rule subjects those assets to stringent capital requirements, significantly increasing the financial and regulatory risks of providing cryptocurrency custody services.

The effort to repeal the rule, known as SAB 121, received bipartisan support in Congress last year. but Then-President Joe Biden He objected to the proposed legislation, leaving the rule intact and further discouraging banks from adopting digital assets. Banks have been largely prohibited from expanding their cryptocurrency 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.

With the pro-crypto Trump administration now in power, there is renewed optimism that SAB 121 could be repealed or revised, allowing banks to hold crypto assets without onerous capital requirements.

Bitcoin hit a record high of around $110,000 on Monday ahead of Trump’s inauguration, sparking broader gains in the cryptocurrency market. As of late Thursday, it was trading at about $104,000.

— CNBC’s Hu Soon contributed to this report.