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Why Morgan Stanley’s CFO thinks tokenization is the next big step for its multitrillion-dollar wealth business

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Morgan Stanley is signaling a growing focus on tokenization and blockchain-based infrastructure, framing “onchain” finance as a potential next step in how it serves wealth clients.

Speaking during the bank’s first-quarter earnings call, executives described a future where assets and liabilities move more freely across digital rails. “How do you think of a tokenized world? How do you think of an onchain world where you can move assets quickly, the same way you’d be able to move those liabilities quickly?” Sharon Yeshaya, the firm’s chief financial officer, said, pointing to a shift beyond traditional account-based systems.

The comments carry added weight given the scale of Morgan Stanley’s wealth business, which oversees trillions in client assets and serves as a central engine of the firm’s growth. Any change to how assets are moved, lent or advised on within that system could have wide-reaching implications across the financial industry.

The comments place tokenization within the bank’s core wealth strategy, not as a standalone crypto initiative. Executives tied the concept to client advisory, lending and cash management, suggesting that digital infrastructure could reshape how portfolios are managed and how clients access liquidity.

“We would be there to offer different types of products on the asset side,” Yeshaya said, adding that the firm is also considering “what kinds of things might exist on the lending side for onchain… and how do you also move and think about all of those digital assets.”

The framing reflects a broader industry shift, in which large banks are increasingly exploring blockchain technology to modernize financial plumbing rather than disrupt it outright.

At Morgan Stanley, that approach remains measured but is quickly progressing.

The firm recently launched a digital asset pilot through a partnership with Zero Hash, allowing select E*Trade clients to buy and sell major cryptocurrencies. While limited in scope, the initiative gives the bank a controlled entry point into digital assets as it evaluates client demand.

Morgan Stanley has also expanded its leadership in the space, appointing Amy Oldenburg as head of digital assets earlier this year. The firm has taken steps to offer bitcoin exposure through its own spot bitcoin ETF, MSBT, which is trading 8% higher since its launch a week ago.

Still, digital assets remain a small part of the business. Instead, the emphasis appears to be on long-term infrastructure. “There’s a lot of creative space in terms of the advice-driven model,” Yeshaya said.

EToro to buy crypto wallet Zengo

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Trading and investment platform eToro has agreed to buy self-custodial crypto wallet provider Zengo in a deal reportedly worth around $70 million.

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Founded in 2007 as a ‘social investment network’ with the aim of opening up capital markets to the masses, eToro lets its 40 million users from around the world trade a host of assets, from fractional equities to crypto.

Zengo’s crypto wallet is known for its keyless wallet architecture designed to enhance security while simplifying self-custody. The firm offers a full-service crypto experience, including on- and off-ramp capabilities, token swaps, staking and access to decentralised applications.

EToro says this will support its effort to offer evolving digital asset use cases, including tokenised assets and emerging decentralised trading models such as prediction markets and perpetuals.

Yoni Assia, CEO, eToro, says: “We believe the future of finance will be increasingly digital, decentralised and user-controlled, with self-custody playing an important role in that evolution. Zengo has built an innovative and secure wallet experience, and this acquisition will enable us to accelerate its growth while continuing to provide users with choice in how they access digital assets.”

Pakistan ends seven-year crypto restriction, allows banks to serve licensed providers

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Pakistan’s central bank notified all banks and financial institutions in the country that the ban on providing crypto services has been lifted.

However, according to the new state bank rules, banks are banned from investing, trading or holding crypto assets using their own funds or customer deposits.

The State Bank of Pakistan’s move follows the recent enactment of the 2026 Virtual Assets Act, which establishes Pakistan’s Virtual Asset Regulatory Authority (PVARA to license, regulate and supervise the sector.

The central bank replaced its 2018 ban on crypto with new rules that permit regulated banks and other financial institutions to open accounts for crypto firms approved under PVARA.

Under the new state bank framework, banks can provide services to virtual asset service providers (VASPs) licensed under the new crypto act, as well as to those seeking approval, subject to strict compliance with anti-money laundering (AML), know-your-customer (KYC), and other counter-terrorism financing regulations.

“Subject to strict compliance with the conditions outlined herein, SBP Regulated Entities (REs) may open bank accounts of entities duly licensed by PVARA as Virtual Asset Service Providers (VASPs),” the State Bank of Pakistan said.

The central bank’s rules also set out detailed conditions for onboarding crypto firms, which include mandatory verification of licenses, enhanced due diligence and ongoing supervision of all their transactions.

In December, the government of Pakistan and Binance signed a memorandum of understanding (MOU) allowing the world’s largest crypto exchange by trade volume to explore the tokenization of up to $2 billion in bonds, treasury bills and commodity reserves in Pakistan.

That same month, the Chairman of Pakistan’s Virtual Assets Regulatory Authority (VARA), Bilal Bin Saqib, announced in a video interview with CoinDesk his country’s plans to accelerate crypto adoption, leverage Bitcoin mining, and launch a national stablecoin.

Roughly 40 million or about 17% of the Pakistani population are involved in crypto trading, the government said in February. The country is the third-largest crypto market by retail activity, ahead of places like Germany and Japan.

Bitcoin BIP-361 Targets Quantum Security Threat

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Update (April 15, 6:45 am UTC): This article has been updated to include comments from Jameson Lopp.

Cypherpunk Jameson Lopp and five co-authors from the Bitcoin quantum security space have proposed freezing quantum-vulnerable coins on the Bitcoin network, including Satoshi’s $74 billion stash, to prevent them from being stolen once quantum computers become available.

The move is the second part of a three-stage proposal under BIP-361 called the “Post Quantum Migration and Legacy Signature Sunset,” which was posted as a draft to GitHub on Tuesday.

It addresses a major risk to Bitcoin — the potential use of quantum computers to steal roughly 1.7 million BTC locked in early P2PK addresses, including Satoshi’s stash, which are not quantum-proof. 

In the wrong hands, these coins could significantly undermine the value of the network. 

Lopp told Cointelegraph on Wednesday that BIP-361 is not currently in a position to be adopted.

“Rather, it’s a rough sketch of one way we could approach the issue of a looming circulating supply shock if quantum computing advances to the point that a post-quantum signature scheme achieves consensus for being added to Bitcoin.”

He expects various aspects of BIP-361 to “continue to evolve over the years as more research and development is conducted in this area.”

Three phases to quantum security 

BIP-361 builds on BIP-360, released in February, which proposed a soft fork for a new output type called pay-to-Merkle-root (P2MR). It works similarly to Bitcoin’s existing Taproot (P2TR) addresses but with the quantum-vulnerable key path removed. 

While BIP-360 protects new coins going forward, it does not address the roughly 34% of the supply that remains vulnerable unless it is transferred to new addresses. 

BIP-361 proposes that three years after activation, phase A of the proposal would prevent any new BTC from being sent to old-style addresses, with all users on quantum-resistant address types.

The second phase (B) would invalidate old-style signatures and any Bitcoin still sitting in vulnerable addresses becomes effectively frozen five years after activation. 

Related: Bitcoin can be made quantum-safe without protocol upgrade: Researcher

Phase C provides a potential rescue mechanism using zero-knowledge proofs, allowing people who missed the deadline but still have their seed phrase to recover frozen funds.

Proposed three-phase solution to the quantum threat. Source: GitHub

The authors described it as a “private incentive to upgrade” because lost or frozen coins only make everyone else’s coins worth slightly more, whereas quantum-recovered coins make everyone else’s worth less.

“This is not an offensive attack, rather, it is defensive: our thesis is that the Bitcoin ecosystem wishes to defend itself and its interests against those who would prefer to do nothing and allow a malicious actor to destroy both value and trust.”

Bitcoin community pushes back 

However, the proposal would render some existing UTXOs unspendable by their owners if they fail to upgrade, which some have seen as a significant philosophical departure from Bitcoin’s ethos. 

Bitcoin protocol developer and researcher Mark Erhardt, who shared BIP-361 on X on Tuesday, was met with community pushback and comments such as “this quantum proposal is highly authoritarian and confiscatory … there is no good rationale for forcing the upgrade and rendering old spends invalid.”

Bitcoin Magazine editor Brian Trollz rejected the proposal outright, TFTC founder Marty Bent called it “laughable,” and Phil Geiger, head of business development at Metaplanet, quipped, “We have to steal people’s money to prevent their money from being stolen.” 

Magazine: Nobody knows if quantum-secure cryptography will even work