Morgan Stanley has named Coinbase and BNY Mellon to play major roles in the custody and administration of its proposed spot bitcoin exchange-traded fund according to an amended filing submitted to the United States Securities and Exchange Commission.
The document outlines the structure of the planned Morgan Stanley Bitcoin Trust which aims to provide investors with regulated exposure to bitcoin through traditional brokerage accounts.
Coinbase Custody Trust Company and BNY Mellon are expected to operate as the fund’s bitcoin custodians responsible for securely storing the digital assets backing the exchange-traded product.
These custodians would also handle transfers of bitcoin that occur when shares of the trust are created or redeemed by authorised market participants.
BNY Mellon is additionally assigned the roles of administrator, transfer agent and cash custodian for the proposed investment vehicle.
These responsibilities include maintaining the trust’s accounting records, managing shareholder data and overseeing cash transactions connected to the fund.
The structure of the trust is designed as a passive investment vehicle that will hold actual bitcoin rather than relying on derivatives or leveraged instruments.
Shares issued by the trust would mirror the performance of the bitcoin held in custody allowing investors to gain price exposure without purchasing the cryptocurrency directly.
Most of the bitcoin assets held by the trust would be stored in offline cold-storage systems where private keys remain disconnected from internet networks.
This storage method is widely used by institutional custodians because it lowers the risk of hacking or cyber intrusion.
A limited portion of the holdings may temporarily move to active trading wallets during share creation and redemption processes.
These transfers occur when authorised participants exchange cash for bitcoin or redeem ETF shares for the underlying digital asset.
The filing also states that custody insurance exists but is shared among multiple clients and may not fully cover all possible losses in the event of a breach.
Similar disclosures have appeared in other spot bitcoin ETF filings as asset managers adopt comparable operational frameworks.
Morgan Stanley initially submitted the application for its bitcoin trust in January signalling a deeper commitment to digital asset markets by one of the largest banks in the United States.
The firm has been gradually expanding its cryptocurrency strategy across wealth management and brokerage services.
Morgan Stanley executives have indicated that the company intends to allow clients using its E*Trade platform to buy and sell spot cryptocurrencies through a partnership arrangement.
The long-term plan includes integrating trading and custody services more tightly within the bank’s existing financial infrastructure.
At a recent Strategy World event, Amy Oldenburg, head of digital asset strategy at Morgan Stanley, highlighted the importance of custody services in the firm’s broader digital asset roadmap.
The bank currently oversees roughly eight trillion dollars in client assets and leadership believes a large portion of those clients already hold cryptocurrencies outside the firm’s platform.
Bringing these holdings under Morgan Stanley’s internal infrastructure would allow the bank to provide custody, trading and related services within a single regulated environment.
The company has also applied for a national trust bank charter which would allow it to directly hold digital assets on behalf of institutional clients.
Approval of that charter would place Morgan Stanley in closer competition with crypto-native custodians while strengthening its presence in the expanding digital asset industry.
At the time of reporting, Bitcoin price was $73,501.87.