Morgan Stanley wins OCC approval for crypto custody trust

Key Takeaways

• Morgan Stanley received OCC conditional approval for a national trust bank charter focused on digital-asset custody
• The trust must maintain $50 million in tier 1 capital and obtain OCC approval for leadership changes during its first three years
• The move signals traditional Wall Street firms are building in-house crypto infrastructure to compete with digital-native custodians

Morgan Stanley just cleared a major regulatory hurdle. The Office of the Comptroller of the Currency granted conditional approval for a national trust bank charter to handle digital-asset custody, the regulator confirmed last week. The approval, signed June 18, came exactly four months after the bank filed its application.

Morgan Stanley Digital Trust National Association will custody certain digital assets and handle related activities: purchasing, selling, swapping, and transferring crypto to support client investments. The trust will also facilitate staking on a fiduciary basis and serve as collateral administrator for digital-asset lending offered by an affiliate.

What does the OCC require from the trust?

The approval comes with strings attached. The trust must maintain at least $50 million in tier 1 capital for its first three years. Half of that amount must be held as eligible liquid assets. On top of that, the trust needs to keep liquid assets equal to 180 days of operating expenses.

Quarterly capital and liquidity assessments are mandatory, along with annual audits from an independent external firm. The OCC retains tight control over personnel decisions. Morgan Stanley must obtain the regulator's non-objection before appointing any senior executive officers or directors during the trust's first three years. The regulator did grant a waiver for residency requirements for three proposed directors.

Any significant deviation from the submitted business plan requires 60 days advance notice to the OCC. The trust must also comply with the Genius Act and limit its operations strictly to trust company activities.

Why is Morgan Stanley building crypto custody in-house?

The trust will likely support Morgan Stanley's September 2025 partnership with Zerohash, a digital-asset infrastructure provider. That deal brought crypto trading to the bank's E*Trade platform. Zerohash has also filed for its own charter.

The logic here is straightforward: control costs and eliminate dependence on third parties. Jasper Sneff Nanni, a managing principal at consulting firm FS Vector, told American Banker that the approval "will create a sense of urgency for wealth management competitors who want to stay on equal footing."

“This is probably less about broadening the services offered and more about reducing reliance on third-party custodians and exchanges. This will allow them to control costs and enforce consistency and reliability in client delivery.”

— Jasper Sneff Nanni, FS Vector

Did anyone object to the approval?

One comment landed on the OCC's desk, from a bank trade group. The group questioned whether Morgan Stanley's planned activities were even permissible for a national trust bank. They raised concerns about whether the OCC could resolve the trust if it failed, and flagged safety and soundness issues related to concentrating on digital-asset services.

The OCC dismissed these concerns. None of them, the regulator said, constituted grounds for denial.

How does this fit the broader regulatory trend?

National trust bank charters have spiked in popularity under OCC chief Jonathan Gould. But most applicants have been crypto-native firms, not Wall Street institutions. Morgan Stanley stands out as an established bank building a dedicated subsidiary rather than a crypto startup seeking banking legitimacy.

The trust will be headquartered in Purchase, New York, operating as a wholly owned subsidiary. This structure keeps the digital-asset operations contained while giving Morgan Stanley direct oversight.

Frequently Asked Questions

What digital assets will Morgan Stanley custody?

The OCC approval covers certain digital assets, though specific tokens were not named. The trust will handle custody, trading, staking, and collateral administration for client investments.

When will Morgan Stanley's crypto trust start operating?

The conditional approval was signed June 18, 2026. The trust must meet capital requirements and appoint approved leadership before launching operations.

Does this mean E*Trade users can trade crypto now?

Crypto trading on E*Trade was announced in September 2025 through a partnership with Zerohash. This trust charter gives Morgan Stanley more direct control over custody rather than relying solely on external infrastructure.

What is a national trust bank charter?

A national trust bank charter grants federal authority to provide fiduciary and custody services. It differs from a full bank charter because the entity cannot accept deposits or make loans.

Who regulates Morgan Stanley's crypto trust?

The Office of the Comptroller of the Currency oversees the trust. It must comply with OCC requirements plus the Genius Act for digital-asset activities.

Source: Banking Dive