James Gorman, CEO of Morgan Stanley, said on a third-quarter earnings call that crypto is “not a fad,” but stopped short of saying it will become an integral part of financial services.

Why should we care?
Gorman’s acknowledgement of the crypto reality is a boost for the legitimacy of crypto as a mainstream category of financial services, but his messaging was cautious. “I don’t know what the value of Bitcoin should or shouldn’t be. But these things aren’t going away, and the blockchain technology supporting it is obviously very real and powerful,” he told analysts. Despite recognizing that crypto has a place, Gorman said Morgan Stanley isn’t seeing much demand for it from clients. The global investment bank and wealth management firm doesn’t offer crypto for its retail clients, but investors can buy crypto through various funds. In comments this week, Citigroup CEO Jane Fraser echoed Gorman’s cautious tone on crypto, saying the bank is proceeding with “great caution,” and that she is “more excited about the technologies behind crypto than some of the products themselves.” In September, Morgan Stanley announced the launch of a new crypto research team that will look at the impact of cryptocurrencies on equities and fixed income worldwide. Other large financial institutions are also dedicating resources to internal cryptocurrency research units, including Bank of America.