A source close to American banking giant Morgan Stanley has today told Bloomberg that it plans to offer its clients Bitcoin trade swaps. This means it would join other Wall Street firms in creating ways for clients to play the digital currency market, if the rumour turns out to be true.
Allegedly, the bank “will deal in contracts that give investors synthetic exposure to the performance of Bitcoin” the source said. They want to remain anonymous, because the information is still private. This person also claimed, “Investors will be able to go long or short using the so-called price return swaps, and Morgan Stanley will charge a spread for each transaction.”
Technically, the bank is already in a position to offer Bitcoin trade swaps, but it is seeking institutional client demand while it also completes an internal approval process for the new offer. As might be expected, Morgan Stanley has declined to comment on the announcement, or should one call it a ‘leak’.
The source also said that Morgan Stanley does not plan to trade Bitcoin directly and its swaps are tied to Bitcoin futures contracts
Other Wall Street banks are already advancing their plans to offer sophisticated derivatives tied to digital assets, and Goldman Sachs and Citigroup are also planning Bitcoin products. Citigroup is developing a new mechanism for trading cryptocurrencies known as digital asset receipts and Goldman Sachs are exploring Bitcoin derivatives called non-deliverable forwards and possibly a custody service for crypto funds.