Morgan Stanley Report: Blockchain Adoption May Not Benefit Tokens

Written by: Rita

Digital assets are transitioning from speculation to financial infrastructure. Stablecoins have surpassed $300 billion in market size, and tokenized real-world assets are nearing $40 billion, with institutional participation accelerating. However, a counterintuitive conclusion in Morgan Stanley’s September 8 report on digital assets suggests that adoption does not equate to token price appreciation—and economic benefits may remain largely within existing financial institutions, with public protocols or token holders未必 benefiting. Integration is the baseline scenario, but value capture is an entirely different challenge.

The core framework of the report separates technology adoption from value capture. Blockchain technology may be widely adopted, but the gains could accrue to institutions that control distribution, custody, and customer relationships. Crypto-native companies are embracing regulation and can either collaborate with or compete against existing institutions. Public protocols only benefit when activity generates sustained token demand. For investors, the key is distinguishing whether technology is being adopted—and who captures the economic value.

Morgan Stanley outlines four scenarios for digital assets through 2030. Convergence is the base case, where institutions use a hybrid of public and controlled tracks to address specific frictions. Private track is the bear case for public protocols, with value remaining within existing institutions and their technology providers. Rapid adoption is the bull case, where public networks capture a larger share of financial activity. Status quo is the bear case for digital assets as an infrastructure theme, with financial markets primarily evolving through modernization of existing systems.

In any scenario, adoption and value capture are independent issues. Existing institutions retain customer relationships, crypto-native companies capture shares of specific infrastructure and services, and public protocols benefit when activity generates sustained token demand. Investors must evaluate tokenomics and competitive positioning, not just adoption rates.

Finance is the clearest proving ground for blockchain. Money, securities, and contracts have been digitized but operate across fragmented ledgers, institutions, and operating windows. Placing cash and assets on compatible, programmable rails can integrate settlement, collateral, compliance, and services. Broadridge’s distributed ledger repurchase platform processes approximately $357 billion in repurchase transactions daily as of June 2026. JPMorgan’s Kinexys processes over $7 billion in payments daily.

Morgan Stanley believes that near-term opportunities include B2B payments and treasury management, repurchase agreements and collateral, and asset tokenization. The likely end state is convergence, not full decentralization. Financial institutions require identity, privacy, governance, compliance, and legal controls; fully permissionless finance is unlikely to become core infrastructure. These controls can be implemented around public networks without replacing them. Private networks remain attractive where confidentiality and counterparty control are paramount. A hybrid architecture is expected, with interoperability determining whether digital assets reduce fragmentation or recreate it.

Bitcoin differs from the broader digital assets theme. Its investment thesis is primarily monetary: a scarce, non-sovereign store of value. Bitcoin’s current market capitalization is approximately 5% of the above-ground gold value. Wider adoption could unlock significant monetary premium potential. High government debt, persistent deficits, and geopolitical fragmentation may support demand for non-sovereign stores of value, but Bitcoin must demonstrate that its long-term returns and diversification benefits can compensate investors for its high volatility and severe drawdowns.

Morgan Stanley’s baseline scenario over the next five years is that Bitcoin becomes a more mainstream satellite allocation, with retail allocation potentially ranging from 1% to 4%, while institutional investment grows but remains more constrained. Risks include quantum computing and continued reliance on retail attention. Bitcoin’s volatility has now reached levels comparable to popular tech stocks, at approximately 40% annualized, with drawdown magnitudes similar to the median of individual stocks.

Stablecoin supply exceeds $3 trillion, yet still represents only about 0.25% of global M2. The average monthly gross transfer volume over the past year was approximately $7.5 trillion, mostly reflecting crypto transactions, CEX wallet flows, and inorganic activity. After applying a filter for isolated payments, the average monthly payment volume in 2026 is projected to be only around $63 billion. Stablecoins are already a critical financial infrastructure for the crypto market and on-chain liquidity, but their broader payment role remains far from developed.

Morgan Stanley’s baseline scenario for digital money is coexistence: stablecoins lead in open public chain activities, tokenized deposits gain traction in bank-dominated institutional workflows, and central bank money anchors settlement where security and finality are paramount. Competition centers on network coverage, interoperability, legal finality, liquidity, and the ability to convert each instrument into sovereign currency at par.

Tokenized real-world assets have exceeded $30 billion, approximately six times the level at the beginning of 2025, with cash-like interest-bearing products accounting for over $17 billion. Tokenized money market funds provide yields to stablecoin issuers, protocol treasuries, and other digital-native investors, and are also beginning to be used as collateral in DeFi. More recent institutional opportunities include collateral liquidity and balance sheet efficiency. The greater reward lies in tokenization reducing issuance, management, reconciliation, and servicing costs.

Tokenization does not guarantee token price appreciation. Economics can be attributed to cryptocurrencies, crypto-native companies, or existing financial institutions. For cryptocurrencies, greater adoption can only support value if the token captures activity through fees, staking, collateral, or other functionalities, after accounting for issuance and selling pressure. Investors must separate adoption from value capture.

Open protocols, regulated crypto-native challengers, and incumbent institutions compete in distribution, trading, issuance, settlement, custody, and connectivity. Incumbents bring regulation, balance sheets, trusted customer relationships, and distribution networks. Crypto-native companies bring faster iteration and infrastructure designed around programmable assets. As a result, economics can be attributed to cryptocurrencies, private company equity, or public stocks.

Morgan Stanley believes that a more sustainable cryptocurrency market requires deeper professional participation. Institutional involvement has expanded through ETPs and other investment products (approximately $150 billion in AUM), and spot custody is maturing; however, most price formation is still driven by retail investors and crypto-native liquidity, leverage, and narratives. Professional capital is expected to flow gradually and selectively toward assets with deep liquidity, credible governance, persistent adoption, and proven value capture.

For investors, the key is to distinguish between technology adoption and token value capture. Digital asset convergence is occurring, and economic benefits are not necessarily captured by the token.

Disclaimer

This article is a compilation and interpretation by Chaoxiang Research of a third-party brokerage research report (Morgan Stanley, September 8, 2026), combined with publicly available market information. The ratings, price targets, earnings forecasts, and related judgments cited herein reflect the views of the brokerage’s analysts and represent the position of their respective institution, not the views of Chaoxiang Research, nor do they constitute any investment advice.

The market carries risks; make decisions independently. This article should not be used as a basis for buying or selling any securities.