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Morgan Stanley Plans To Offer Bitcoin Swap Trading


Banking major Morgan Stanley is planning to offer trading in complex derivatives tied to Bitcoin, the largest cryptocurrency, Bloomberg reported citing a person familiar with the matter.

The bank would deal in contracts that give investors synthetic exposure to Bitcoin's performance. Using the so-called price return swaps, the bank's investors would be able to go long or short, and it will charge a spread for each transaction.

Morgan Stanley does not plan to trade Bitcoin directly and its swaps are tied to Bitcoin futures contracts.

As per the report, the bank is already technically prepared to offer the Bitcoin swap trading. The service will be launched once there is proven institutional client demand and after the completion of an internal approval process.

Morgan Stanley recently hired Andrew Peel as head of digital asset markets from Credit Suisse Group AG.

Earlier, Chief Executive Officer James Gorman said that the customers will not be able to buy and sell cryptocurrencies directly through the bank, instead, it would build a trading desk to support various derivatives tied to digital assets.

Many Wall Street banking majors, including Goldman Sachs Group Inc. and Citigroup Inc., are also said to be preparing new products tied to Bitcoin, despite its diminishing value.

CNBC reported last week, citing Goldman Sachs Chief Financial Officer Martin Chavez, that the recent reports about the company abandoning its plans to open a Bitcoin trading desk are fake news. He said the bank is working on bitcoin derivative for clients.

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