MS Digital Assets From Disruption to Convergence

M September 8, 2026 04:00 AM GMT

Morgan Stanley & Co. International plc+

Felician G Stratmann Equity Strategist

Digital Assets: From Disruption

to Convergence Michael J. Cyprys, CFA, CPA Equity Analyst

James E Faucette Digital assets are moving from speculation toward financial Equity Analyst infrastructure. Our base case is convergence: public protocols Betsy L. Graseck, CFA develop more permissioning while institutions adopt public rails Equity Analyst where distribution and liquidity are key. Adoption and where Stephen C Byrd Equity Analyst value will accrue are the key questions.

Morgan Stanley & Co. International plc+ Key Takeaways Russell Quelch Equity Analyst Finance is blockchain’s clearest proving ground: digital cash, collateral, repo, and

tokenized funds are emerging use cases. Giulia Aurora Miotto, CFA Equity Analyst Adoption is growing: stablecoins exceed $300bn and tokenized RWA near $40bn;

most activity is still crypto-native, but institutions are rapidly entering. Morgan Stanley Asia Limited+

Adoption does not guarantee token upside: economics can accrue to Richard Xu, CFA Equity Analyst cryptocurrencies, crypto-native companies, or incumbent financial institutions.

Bitcoin stands apart: its thesis is 'digital gold'. Broader crypto needs durable Morgan Stanley MUFG Securities Co., Ltd.+

usage, credible value capture, and a deeper professional investor base. Mia Nagasaka Equity Analyst Blockchains compete on network effects and technical specs but also on how

well compliance and privacy can be incorporated.

Regulation is defining a more credible path for institutional participation, stablecoins show the potential of digital money, financial markets are extending operating hours, and competition is moving inside the regulatory perimeter. At the same time, crypto prices have fallen sharply despite continued progress in tokenization and institutional infrastructure.

The key milestone is real usage, not just announcements: transaction volumes, assets on-chain, institutional clients, collateral mobilized, and workflows moving into production. Interoperability will determine whether digital assets create a connected financial ecosystem or simply reproduce today’s fragmentation.

Investors should separate two questions: 'Is the technology being adopted?' and 'Who captures the economics?' Incumbents may retain the client relationship while Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, using blockchain underneath; crypto-native firms are embracing regulation and can investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley collaborate and compete with incumbents; and public protocols benefit where Research. Investors should consider Morgan Stanley activity creates durable token demand. Research as only a single factor in making their investment decision. For broader cryptocurrencies, professional capital is increasingly important. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this Fundamental adoption can strengthen the case for selected networks, but durable report. price discovery is harder if marginal demand remains dominated by retail flows, += Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member leverage, and narratives. and may not be subject to FINRA restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

The Big Picture Exhibit 1: Digital assets in a nutshell

What are digital assets? Native crypto Digital Money Tokenized Assets Bitcoin stands apart “Cryptocurrencies” “The cash leg” “Real world assets” • Store of value • Stablecoins • Securities A distinct, monetary thesis: "digital • Platform tokens • Tokenized deposits • Funds gold“ • Apps / protocols • CBDCs • Commodities A scarce, non-sovereign store of value, • Community • Real estate not a bet on new financial ~$40bn** infrastructure. $2.4tn $300bn* $1.6tn Run on: Blockchains, Programmable via smart contracts ~67% of the native crypto market