Wall Street Moves Onchain as Banks Embrace Digital Assets

For years, major banks treated cryptocurrency primarily as a risk to be contained. That posture is now giving way to a more deliberate form of engagement. Rather than debating crypto’s legitimacy, banks are increasingly deciding how and where to integrate it, from regulated investment products to blockchain-based payment rails.

This shift is on full display in this week’s Crypto Biz. JPMorgan is extending its US dollar deposit token onto new blockchain infrastructure, signaling that tokenized cash is moving closer to production use within global banking. 

Morgan Stanley, meanwhile, is positioning itself to offer exposure to Bitcoin (BTC) and Solana (SOL) through exchange-traded funds (ETFs), potentially bringing crypto investments to millions of wealth management clients. 

Barclays has made its first bet on stablecoin infrastructure, backing settlement rails designed to connect regulated issuers with financial institutions. 

And Bank of America has taken another step toward normalization by allowing advisers to recommend spot Bitcoin ETFs to clients.

Together, these moves suggest the banking sector is no longer content to watch from the sidelines.

JPM Coin heads to the Canton Network

JPMorgan announced plans to issue its US dollar-denominated deposit token, JPM Coin (JPMD), natively on the Canton Network, marking another step by Wall Street toward production-ready blockchain infrastructure.

Digital Asset, the developer of the Canton Network, and Kinexys by JPMorgan will extend JPM Coin from its existing rails onto Canton’s privacy-focused layer-1 blockchain, enabling regulated digital cash to move across interoperable networks.

According to an announcement shared with Cointelegraph, JPM Coin, described as the first bank-issued, US dollar-denominated deposit token for institutional clients, represents a digital claim on JPMorgan’s dollar deposits and is designed to facilitate faster, more secure movement of regulated money on public blockchains.

“This collaboration brings to life the vision of regulated digital cash that can move at the speed of markets,” said Yuval Rooz, co-founder and CEO of Digital Asset.

Morgan Stanley enters crypto ETF race

US investment bank Morgan Stanley is entering the cryptocurrency exchange-traded fund market, with proposed products offering exposure to Bitcoin and Solana, following the strong debut of spot crypto ETFs in the United States.

The bank has filed with the US Securities and Exchange Commission to launch two investment vehicles, the Morgan Stanley Bitcoin Trust and the Morgan Stanley Solana Trust, designed to provide passive investment exposure to the performance of their underlying digital assets.

If approved, the funds could be made available to more than 19 million clients within Morgan Stanley’s wealth management division, significantly expanding access to crypto-linked investment products.

Spot Bitcoin ETFs have ranked among the most successful ETF launches on record, attracting substantial inflows during their first two years of trading. Momentum has continued into the new year, with renewed investor demand driving fresh inflows during the first trading sessions.

Barclays invests in stablecoin infrastructure

London-based banking giant Barclays has made its first investment in a stablecoin-focused company, signaling traditional finance’s growing interest in digital dollar infrastructure.

The bank announced an undisclosed investment in Ubyx, a US-based stablecoin clearing platform that connects regulated issuers with financial institutions to facilitate settlement and interoperability. The move also marks a notable shift for Barclays, which in recent years has publicly emphasized the risks associated with digital assets.

“This investment aligns with Barclays’ approach to explore opportunities based on new forms of digital money, such as stablecoins,” the bank said in a statement.

Ubyx has previously raised $10 million in seed funding, backed by Galaxy and Coinbase. The company was founded by Tony McLaughlin, a former Citibank executive.

Bank of America wealth advisers cleared to recommend Bitcoin ETFs

US investors may soon receive recommendations to buy Bitcoin ETFs from Bank of America’s private bank and Merrill Edge platforms, adding to evidence of Bitcoin’s growing integration into traditional finance.

The bank’s chief investment office has approved coverage of four U.S. spot Bitcoin ETFs, including products offered by Bitwise, Fidelity, BlackRock and Grayscale. Collectively, the funds manage more than $100 billion in Bitcoin assets.

The move comes roughly a month after Bank of America reportedly advised wealth management clients to allocate 1% to 4% of their portfolios to digital assets.

“For investors with a strong interest in thematic innovation and comfort with elevated volatility, a modest allocation of 1% to 4% in digital assets could be appropriate,” Chris Hyzy, chief investment officer at Bank of America Private Bank, told Yahoo. 

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