Morgan Stanley Reportedly Sees 'Reasonable Path' For DeFi Vaults, Six Months After Bitcoin ETF Debut

• Morgan Stanley's digital assets head told Bloomberg there is a "very reasonable path" for DeFi vaults to become a part of the bank's future.

• She said the technology is "too nascent" to risk the wider platform, so testing comes first.

• The financial firm launched its Bitcoin ETF in April, the first spot Bitcoin ETF from a major U.S. bank.

Morgan Stanley (MS) stock traded relatively flat in morning trade on Tuesday after the bank reportedly singled out decentralized finance (DeFi) vaults as an "area of particular interest," and has set up a Digital Asset Lab to test the new technology.

"There is a very reasonable path to see vaults being part of the future going forward," Amy Oldenburg said, Bloomberg reported on Tuesday. "But we need to understand how that technology works - it is too nascent; we cannot put the rest of the platform at risk."

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Why Asset Managers Are Still Cautious About Crypto Vaults

Vaults are pools of assets that automatically put capital to work depending on a predefined strategy via blockchain-based software. Investors deposit assets, often stablecoins or other digital tokens, and the vault puts them to work across decentralized markets. Investors typically receive a token representing their share, and operators can charge fees for managing the strategy.