Morgan Stanley Advances Blockchain Infrastructure Goal With Preliminary Bank Approval

Morgan Stanley obtained preliminary conditional approval from the Office of the Comptroller of the Currency (OCC) to charter a de novo national trust bank called Morgan Stanley Digital Trust, National Association (MSDTNA).

MSDTNA is now working to satisfy OCC conditions for final approval, law firm Davis Polk, which advised Morgan Stanley on the preliminary conditional approval from the OCC, said in a Thursday (June 25) blog post.

Davis Polk submitted a charter application and request for confidential treatment on behalf of MSDTNA and Morgan Stanley Capital Management as sponsoring organization of MSDTNA on Feb. 18, according to a letter posted on the OCC’s website.

The OCC granted its conditional approval for the de novo charter application on June 18, per a corporate decision posted on the regulator’s website.

According to the Davis Polk blog post, “MSDTNA plans to provide digital asset custody and ancillary services to Morgan Stanley affiliates and their customers nationwide.”

The services include supporting Morgan Stanley Wealth Management, which provides financial services to individual investors, small- to medium-sized businesses (SMBs) and larger institutions; providing custody of digital assets and conducting certain activities incidental to banking, including the purchase, sale, swap and transfer of digital assets to support client investment activities; and facilitating the staking of digital assets on a fiduciary basis and acting as a collateral administrator to support digital asset lending offerings by an affiliate, per the post.

PYMNTS reported in February that national trust bank charters are becoming tools for stablecoin issuance, digital asset custody and standing out in a crowded market.

While getting a bank charter used to be something only traditional financial institutions worried about, a growing number of FinTech companies now see charters as tools that can shape how they build their businesses, manage compliance and compete in the market, the report said.

The shift is being driven by the rise of digital assets, the growth of payment stablecoins and a regulatory environment that is being rewritten.

PYMNTS reported in January that the growing appeal of national trust bank charters is closely tied to changes in regulatory posture, as OCC statements express support for novel and innovative activities conducted through trust banks.

In February, PYMNTS reported that with its submission of an application to the OCC for a charter for a national trust bank, Morgan Stanley is trying to own the custody, settlement and fiduciary plumbing layer of blockchain finance under U.S. bank supervision.

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