The news: Morgan Stanley is launching crypto trading on its E*Trade platform, per Bloomberg. In charging 50 basis points per dollar, per trade, it will be cheaper than both Coinbase and Robinhood.

The strategy: The bank wants to bring crypto in-house as part of a broader digital currency strategy, including:

• Launching Bitcoin ETFs at the lowest cost among its peers
• Planned Ether and Solana ETFs
• Applying for a trust bank charter to enable crypto custody
• Potential tokenized equity trading 

Why this matters: Morgan Stanley is looking to leverage its large wealth and retail client base to keep crypto activity within its own ecosystem, rather than losing customers to crypto platforms.

More broadly, Morgan Stanley’s strategy reflects a shift in the digital currency competitive landscape. The bank isn’t just launching crypto products—it’s using its scale to directly compete with fintechs on price. As banks move in with lower-cost offerings, crypto firms may have to cut fees or risk losing customers.

Zoom out: The move coincides with renewed legislative momentum that could bring more clarity to the US crypto industry. The Clarity Act is advancing toward a vote, per Coinpedia, with a potential path to passage by early July. Prediction markets currently assign roughly a 67% chance of approval.

Regulatory uncertainty has been one of the biggest barriers to banks fully entering crypto. Progress on the Clarity Act signals a more defined framework for digital assets—particularly around stablecoins—and should give banks greater confidence.

Implications for banks: Morgan Stanley’s crypto trading launch, alongside regulatory movement, suggests banks are entering a more aggressive phase of crypto expansion. They are leveraging pricing and existing client relationships to build competitive crypto businesses.

But risks remain: Demand is still cyclical, and regulatory conditions could shift again. And more competitors engaging in pricing wars could limit long-term profitability.

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