Charles Schwab and Morgan Stanley's E*Trade are each preparing to launch direct spot cryptocurrency trading for retail clients in the first half of 2026. Combined, the two firms manage approximately $18 trillion in client assets across roughly 44 million active brokerage accounts. Schwab, operati...
"The signals have been pretty green for us to do more." — Rick Wurster, CEO, Charles Schwab
Charles Schwab and Morgan Stanley's ETrade are each preparing to launch direct spot cryptocurrency trading for retail clients in the first half of 2026. Combined, the two firms manage approximately $18 trillion in client assets across roughly 44 million active brokerage accounts. Schwab, operating through Charles Schwab Premier Bank, opened a waitlist in early April for its "Schwab Crypto" account covering Bitcoin and Ethereum. ETrade, working through infrastructure partner Zerohash, has published a coming-soon page for Bitcoin, Ethereum, and Solana trading.
Both launches follow a 12-month regulatory unwind that removed the three principal barriers to bank-adjacent crypto custody: the SEC's rescission of SAB 121 in January 2025, the OCC's March 2025 reaffirmation that crypto custody is permissible for national banks, and the Federal Reserve's April 2025 withdrawal of its prior crypto guidance. Fidelity, which already offers spot crypto trading to its 46 million accounts, is the only incumbent of comparable scale. Together, these three firms represent a distribution channel of over 90 million brokerage accounts — a structural shift in how retail investors access digital assets.
Charles Schwab reported $12.22 trillion in client assets and 38.9 million active brokerage accounts as of February 2026. The firm's crypto offering, branded "Schwab Crypto," will operate through Charles Schwab Premier Bank, SSB — a banking subsidiary, not the broker-dealer entity.
The product specifics, as disclosed on Schwab's waitlist page and confirmed through CEO Rick Wurster's statements to Barron's:
The closed-loop design — no external deposits or withdrawals — places Schwab's model closer to a walled garden than to the open-access architecture of crypto-native exchanges. Clients cannot move BTC or ETH to self-custody wallets, hardware wallets, or competing platforms.
Morgan Stanley's ETrade, which manages approximately $6 trillion in client assets, has confirmed plans to launch spot crypto trading in the first half of 2026. Unlike Schwab's bank-subsidiary approach, ETrade is routing through Zerohash, a digital asset infrastructure provider that raised $104 million at a $1 billion valuation. Morgan Stanley also invested directly in Zerohash as part of the arrangement.
ETrade's initial asset lineup is broader: Bitcoin, Ethereum, and Solana. The Zerohash partnership builds a full wallet solution for ETrade clients, with Zerohash handling execution, settlement, and custody infrastructure on behalf of Morgan Stanley.
Specific details on fee structure, geographic restrictions, and withdrawal capabilities have not been disclosed as of April 6, 2026.
The timing of both launches traces directly to three regulatory actions in 2025 that collectively removed the structural impediments for bank-affiliated entities to hold and transact in digital assets:
January 2025 — SAB 122 replaces SAB 121. The SEC rescinded Staff Accounting Bulletin 121, which had required custodians to record client crypto holdings as liabilities on their own balance sheets. This accounting treatment had made crypto custody uneconomical for banks subject to capital adequacy rules. SAB 122 removed the requirement, allowing standard off-balance-sheet treatment.
March 2025 — OCC Interpretive Letter. The Office of the Comptroller of the Currency reaffirmed that crypto custody, certain stablecoin activities, and participation in distributed ledger networks are permissible for national banks. The OCC also removed the prior supervisory non-objection requirement, eliminating a de facto veto that had slowed approvals.
April 2025 — Federal Reserve Guidance Withdrawal. The Federal Reserve withdrew its earlier supervisory guidance on crypto activities, removing the third of three federal-level impediments.
Schwab CEO Wurster characterized this regulatory environment as "pretty green" for large firms to move forward. The product calendar at both firms aligns precisely with this policy calendar — development began in earnest after the April 2025 Fed withdrawal, with launches targeted 12-14 months later.
Fidelity Investments is the sole traditional brokerage of comparable scale that already offers direct spot crypto trading. Fidelity Crypto, operated through Fidelity Digital Assets (FDA), a nationally chartered trust bank, currently supports five assets: Bitcoin, Ethereum, Litecoin, Solana, and Fidelity's own stablecoin, the Fidelity Digital Dollar (FIDD).
Key differences from the Schwab and E*Trade models:
Fidelity's head start matters. It has built proprietary custody, staking, and transfer infrastructure that Schwab and E*Trade will need years to replicate — or will choose not to replicate, opting instead for the simpler walled-garden model.
The entry of traditional brokerages into spot crypto trading creates a structural threat to the fee model of crypto-native exchanges. The arithmetic is straightforward:
Coinbase processed approximately $234 billion in quarterly trading volume as of Q3 2025, holding roughly 41% of North American crypto exchange activity. Kraken processed $102 billion, holding 3.6% of global share.
The threat is not immediate volume displacement. Schwab's limited asset selection (BTC and ETH only), lack of withdrawal capability, and absence of advanced order types make it unattractive to active traders who constitute the bulk of exchange volume. The threat is to the marginal retail buyer — the long-term holder who currently pays 1%+ per purchase on Coinbase and would prefer to buy through their existing brokerage alongside stocks and bonds.
Robinhood, which generated $268 million in crypto revenue in Q3 2025 (21% of total revenue), faces a similar competitive dynamic. The firm reported a 44% year-over-year decline in crypto Daily Average Revenue Trades for January 2026, indicating existing weakness before the brokerage entrants even launch.
The institutional custody landscape is bifurcating. BNY Mellon, the world's largest custodian bank, was the first G-SIB to offer regulated digital asset custody and has expanded into tokenized deposits and on-chain settlement. It serves as custodian for Morgan Stanley's proposed Bitcoin ETF alongside Coinbase Custody.
BNY CEO Robin Vince stated in March 2026 that large financial institutions will drive the next phase of crypto adoption by serving as a bridge between traditional finance and digital assets. This view frames crypto custody not as a standalone product but as an extension of existing multi-asset servicing.
For Schwab and E*Trade, custody through bank subsidiaries (or via Zerohash) keeps assets within the regulated banking perimeter. This offers clients the familiarity of bank-level oversight but at the cost of asset portability. Crypto-native exchanges, by contrast, generally allow withdrawal to self-custody — a feature that appeals to users who value sovereign ownership but that creates regulatory and compliance overhead.
The tradeoff is clear: bank-brokerage models optimize for compliance and account integration; crypto-native models optimize for asset sovereignty and breadth.
Several factors remain unresolved and could alter the competitive landscape:
The entry of Schwab and E*Trade into spot crypto trading is a distribution event, not a product event. Neither firm is building novel custody technology or expanding the crypto asset universe. What they bring is scale: 44 million accounts, $18 trillion in assets, and the embedded trust of clients who already hold stocks, bonds, and mutual funds on these platforms.
The 2025 regulatory calendar made this possible. Without SAB 122, OCC reaffirmation, and the Fed's guidance withdrawal, bank-adjacent entities could not economically offer crypto custody. The policy changed; the product followed within 14 months.
For crypto-native exchanges, the competitive impact is asymmetric. Coinbase and Kraken retain advantages in token breadth, withdrawal flexibility, staking, and advanced trading features. But on the simplest transaction — buying and holding BTC or ETH — they now compete with firms whose distribution advantage is orders of magnitude larger.
The question is not whether this shifts volume. It is how much, and how quickly the brokerages expand beyond the initial walled-garden constraints. Every feature gap — no withdrawals, no staking, no limit orders, two tokens only — is also a roadmap item. The initial product is the floor, not the ceiling.