Author: Gabby

During the Bitcoin 2026 Conference in Las Vegas, Morgan Stanley’s head of digital asset strategy, Amy Oldenburg, shared insights on the possibility of US banks holding Bitcoin directly on their balance sheets. She noted that while such a scenario is not imminent, regulatory advancements over the past 16 months have made it more conceivable. Oldenburg emphasized that if this progress continues, direct Bitcoin holdings by banks could become a reality in the future.

However, she highlighted two major hurdles that must be overcome. First, the Basel Committee needs to revise its current 1,250% risk-weighting for Bitcoin, which makes such exposure economically unfeasible under existing rules. Second, the Federal Reserve must issue clear guidance for examiners regarding Bitcoin exposure. Encouragingly, the Basel Committee announced in February 2026 that it has expedited a targeted review of its crypto standards.

Meanwhile, Morgan Stanley has made significant strides in the crypto space. On April 8, the bank launched MSBT, the first spot Bitcoin ETF issued by a major US commercial bank, with Coinbase Custody and BNY Mellon as custodians. Within its first eight days, MSBT attracted $103 million in net inflows, primarily through self-directed channels without any advisor involvement. This underscores a gap in advisor education that the bank is now addressing through internal training.

Furthermore, Morgan Stanley is actively pursuing an OCC digital trust charter to enable direct crypto custody and spot trading. It has also filed for Ethereum and Solana trusts, with plans to introduce retail crypto trading on E*Trade in the first half of 2026. Despite these initiatives, the bank currently recommends a modest 2% to 4% Bitcoin allocation for certain clients, reflecting a cautious yet forward-looking approach.

Paradigm Bitcoin general partner Dan Robinson unveiled a novel concept on May 1 designed to address a pressing threat to long-dormant Bitcoin holders. Termed Provable Address-Control Timestamps, or PACTs, the system enables owners of old Bitcoin addresses to generate cryptographic proof of key possession without exposing their coins or identity. This approach is particularly aimed at protecting wallets that predate modern security standards, including the legendary trove attributed to Satoshi Nakamoto.

PACTs operate through a three-step process that remains entirely off-chain. First, the holder creates a secret salt. Next, they generate a BIP-322 ownership proof. Finally, that proof is committed to an OpenTimestamps record, which is anchored to the Bitcoin blockchain. Crucially, no transaction is broadcast, preserving anonymity. If Bitcoin later adopts a quantum sunset soft fork to freeze vulnerable addresses, PACT holders could use a STARK zero-knowledge proof to migrate their coins without revealing their private keys.

The proposal emerges amid growing debate about quantum computing’s potential to crack Bitcoin’s elliptic curve cryptography. According to crypto.news, roughly 1.7 million BTC reside in exposed address types, with Satoshi-linked wallets alone holding an estimated $75 billion. Robinson explicitly acknowledged that a forced migration would compel Satoshi to disclose his identity, writing that revealing keys would require “telling the world that they are alive and still in possession of their keys.”

PACTs build on BIP-361, authored by Casa CSO Jameson Lopp, which outlines a phased migration away from legacy signatures and eventual freezing of unmigrated coins. However, Robinson conceded that multisig, complex scripts, and hardware wallet support require further standardization, and that Bitcoin may never implement a quantum sunset at all. This has fueled a broader conflict, with Blockstream CEO Adam Back arguing at Paris Blockchain Week for opt-in quantum-resistant upgrades rather than forced freezes.

Industry experts have underscored the stakes. Naoris Protocol CEO David Carvalho warned that dormant wallets, including Satoshi’s, would become “ripe for the picking” as quantum computers advance, and that a quantum hack on Bitcoin “would lead to a real loss of trust” in the asset. PACTs thus represent a pragmatic hedge, allowing holders to silently establish a claim that can be honored later without compromising their security or privacy.

A recent poll of 1,000 registered American voters conducted in April by Public Opinion Strategies on behalf of CoinDesk reveals that cryptocurrency ranks dead last among election issues. Only 1% of respondents identified crypto as their top concern, and a mere 3% considered it the single most important issue for the 2026 midterms.

The survey, which carries a credibility interval of plus or minus 3.53%, had an equal split of 41% Republicans and 41% Democrats. Negative sentiment toward crypto was widespread outside the GOP base. Among independents, 48% held unfavorable views versus 27% favorable. Democratic-leaning voters were similarly negative: 54% unfavorable compared to 26% favorable. Republican leaners barely registered a net positive at 41% favorable versus 39% unfavorable.

Further highlighting the disconnect, 62% of respondents expressed distrust in the Trump administration’s ability to oversee the cryptocurrency sector. In contrast, artificial intelligence fared much better in the same survey, with 46% favorable and 45% unfavorable—a net positive that crypto failed to achieve.

Only 27% of respondents had ever invested in, traded, or used cryptocurrency, while another 27% said they had not done so but might consider it in the future. Despite the low priority rankings, 22% of voters acknowledged crypto as an important issue, and 40% indicated they would vote for a candidate aligned with their views on digital assets.

The industry’s legislative hopes, such as the CLARITY Act, face an uphill battle. As crypto.news previously covered, TD Cowen warned that the 2026 midterm cycle could push the bill off the congressional calendar until 2027, citing voter indifference as a direct threat. Crypto advocacy groups spent an estimated $120 to $130 million in the 2024 elections, with 2026 spending expected to surpass that figure. However, Binance Research notes that midterm years historically see Bitcoin declines averaging around 56%, often followed by a recovery once electoral uncertainty dissipates.

Senators Thom Tillis and Angela Alsobrooks reached a compromise on the CLARITY Act on May 1, banning passive stablecoin yield while allowing activity-based rewards tied to payments and platform usage. This deal reduces some investor uncertainty, but Daniel Reis-Faria, CEO of ZeroStack, remains cautious. He notes that larger investors are still hesitant because the full implementation rules are not yet in place—only the principle has been agreed upon. The Senate Banking Committee plans a markup in mid-May, with a floor vote targeted before the Memorial Day recess. Despite the positive movement, Reis-Faria emphasizes that until the regulatory framework is fully detailed, big players will likely adopt a wait-and-see approach. Polymarket odds for the CLARITY Act passing in 2026 jumped significantly after the deal, but JPMorgan had previously described its passage as a key catalyst for digital assets. The one-year window for joint rulemaking by the SEC, CFTC, and Treasury adds ambiguity that reins in institutional enthusiasm. Standard Chartered estimates that uncapped stablecoin yield could shift up to $500 billion from banks by 2028, explaining ongoing banking industry resistance. Overall, the deal is a step forward, but not a game-changer for major investors.