New York-based investment bank Morgan Stanley plans to launch Bitcoin swap trading services. The derivatives will be tied to bitcoin futures contracts.
Citing a person familiar with the matter, Bloomberg reports that Morgan Stanley, the sixth-largest bank in the U.S. by assets, is creating a proprietary derivatives product that will give traders “synthetic exposure” to the price of bitcoin.
“The U.S. bank will deal in contracts that give investors synthetic exposure to the performance of Bitcoin, said the person, who asked not to be identified because the information is private. 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, the person said,” – the report on the issue reads.
The company does already have the tools necessary for launching this new service and is currently monitoring the demand among the institutional investors.
According to earlier statements made by James Gorman, CEO Morgan Stanley, the company has been forming the team which will be tasked with studying and supporting derivatives tied to various cryptocurrencies.
The bank joins a growing number of major financial institutions that are said to be evaluating how best to integrate cryptocurrencies into their institutional product lines. Both Goldman Sachs and Citigroup, the fourth- and fifth-largest U.S. banks, respectively, plan to offer bitcoin derivatives products to their clients. JPMorgan has reportedly also begun exploring ways to help its clients invest in cryptocurrency, despite the fact that CEO Jamie Dimon has been one of bitcoin’s most vocal critics.