Multinational investment bank and financial services company Morgan Stanley is reportedly considering plans to launch cryptocurrency trading services through its E*TRADE arm amid an expected more favorable regulatory environment under the incoming second Trump administration.

The news was first reported by The Information, which claims that the plans are still in the exploratory phase.

Morgan Stanley acquired E*TRADE for $13 billion in 2020. The service currently offers indirect exposure to cryptocurrencies through investment products such as futures, exchange-traded funds and stocks related to digital assets. Some of the offerings currently available on E*TRADE include the Grayscale Bitcoin Trust and the ProShares Bitcoin Strategy ETF.

Should E*TRADE proceed with direct cryptocurrency trading services, it would position the firm as one of the largest traditional financial institutions to enter the digital asset trading space. But it is a slight case of deja vu, since it isn’t the first E*TRADE has considered offering cryptocurrency trading. Prior to its acquisition by Morgan Stanley, the then independently owned ETrade Financial Corp. was also considering offering support for cryptocurrency in 2018, but regulations and its eventual acquisition got in the way.

The decision, some seven years later, for E*TRADE once again to consider entering the cryptocurrency trading market comes as a change in president promises a more favorable regulatory environment for digital assets. As noted by Crypto Briefing, the incoming Trump administration has signaled a pro-crypto stance, aiming to position the U.S. as a leader in the cryptocurrency market.

E*TRADE’s renewed interest in offering direct cryptocurrency trading services can also be argued to reflect a strategic response to not only the anticipated regulatory support but also growing demand for digital assets among investors. By opening its books and services to cryptocurrencies, E*TRADE, and hence parent company Morgan Stanley, enhances its competitive position versus other traditional firms that do not offer cryptocurrency services.

Should Morgan Stanley, through E*TRADE, enter the cryptocurrency business, the offering will also present a significant challenge to existing leading players in the U.S., such as Coinbase Global Inc. and Robinhood Markets Inc. Though competition is excellent for the consumer, it isn’t so good for existing players, particularly when the new competition is owned by one of the world’s largest banks, with a market cap of $201 billion.

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