National trust banking charters aren’t simply for fintechs, it turns out.
Morgan Stanley has applied with the Office of the Comptroller of the Currency to create a national trust bank, according to documents made public Friday.
Morgan Stanley Digital Trust National Association, as it would be called, “intends to custody certain digital assets and conduct certain activities incidental to the business of banking, including the purchase, sale, swap and transfer of digital assets to support client investment activities, and facilitate customer staking of digital assets on a fiduciary basis,” according to the application, seen by Banking Dive.
The trust bank would support Morgan Stanley’s wealth-management arm, the bank said. To reinforce that connection, the application lists Chad Turner, Morgan Stanley’s head of wealth management platforms, as proposed president of MSDTNA. The digital trust’s other two listed executives, proposed CEO John Ryan and proposed Chief Operating Officer Amanda Kan, are now president and COO, respectively, of U.S. banks for Morgan Stanley, according to LinkedIn.
Morgan Stanley’s application, filed Feb. 18, became public on a day when the OCC finalized a proposal arguably meant to clarify that national trusts may engage in “business of banking activities,” including nonfiduciary custody.
“The purpose of the final rule is merely to align the OCC’s regulations with the statutory authorization in [The National Bank Act] to avoid any implication that national trust banks may not conduct any activities within the business of banking,” the rule’s text reads. “These activities may be part of trust company operations, such as custody, or activities related thereto.”
Until this point, most of the recent applications for national trust banking charters have come from fintech firms – specifically, crypto and stablecoin-minded ones that are looking for federal oversight but through a license framework that generally doesn’t involve deposit-taking.
Circle Internet Group, Ripple, Paxos Trust, BitGo and Fidelity Digital Assets received the OCC’s conditional approval in December for national trust banking charters.
Stripe subsidiary Bridge and Crypto.com each received a conditional green light last month. Meanwhile, firms continue to apply: Cross-border platform Payoneer announced last week that it applied for a national trust banking charter. World Liberty Financial, led by the family of President Donald Trump, has also applied for a national trust banking charter – a move that’s been derided by some of the White House’s political opponents.
Morgan Stanley has generally never been seen as a competitor to those firms. It counts $1.4 trillion in assets and has been considered a global systemically important bank since the Financial Stability Board published its initial list in 2011.
But it’s not the only massive bank to ask the OCC for a trust charter. Laser Digital, an offshoot of Japanese financial giant Nomura, applied for that type of license in January.
Morgan Stanley has moved, over the past several months, to boost the profile of its digital-assets business. It tapped longtime investment management executive Amy Oldenburg as head of digital-asset strategy, effective last month. Morgan Stanley in January also filed paperwork to hold bitcoin and Solana and to hold Ether in exchange-traded funds. Further, the bank partnered with infrastructure provider Zerohash last September to allow crypto trading on the E*Trade platform.
The trust filing, made public Friday, would be in service to the latter effort, a person familiar with the matter told American Banker.
Morgan Stanley, in the filing, said it does not intend to make non-cash contributions to capital with respect to the digital trust during its three-year de novo period. Further, the digital trust does not currently intend to borrow to fund operations in that time, the bank said.
