Finance giant Morgan Stanley makes major announcement on cryptocurrency: 'Tip of the iceberg'

Finance giant Morgan Stanley's move to offer cryptocurrency trading to retail customers is a signal that digital money will become more common soon.  

That's because Morgan Stanley intends to offer the service as early as next year, according to CNBC. 

The announcement, which made headlines late last month, impacts the energy sector, too. Massive amounts of power are needed to "mine" bitcoins through complex mathematical equations, requiring loads of computing. The processing "secures transactions" and mints new digital coins, according to global clean energy company Iberdrola. 

"Offering clients the ability to trade crypto is the tip of the iceberg," Morgan Stanley wealth management head Jed Finn said in a memo, per CNBC. 

Retail trading is expected to start early next year through the company's E-Trade business, including popular cryptos bitcoin, ether, and solana. Morgan Stanley is among other finance companies expanding these offerings as government policy has shifted in its favor. The White House announced in July that its goal is to make "America the crypto capital of the world." 

It's all part of a financial future that could include blockchain-based ledgers, tokenized financial assets, and more cryptocurrencies. 

"We see immense power in the cryptocurrency space, not just with crypto as an investment for our clients, but also around [distributed ledger technology] and tokenization more broadly," Finn said. 

Finding enough energy to power all this high-tech money management is another matter. EnergyStar estimated that a single crypto transaction consumes the same amount of power as is needed by six U.S. homes in a day. The report added that global annual crypto power demand is the same as what's generated by 19 coal-fired plants running continuously. 

If fueled entirely by nonrenewables, the result would be a terrible heat-trapping air pollution burden. NASA linked gases from burnt dirty fuels to increased risks for severe weather such as droughts, wildfires, and floods. 

Fortunately, progress has been made. A University of Cambridge report published in April found that 52.4% of bitcoin mining uses renewable energy. Nearly 10% of it is nuclear. It's progress from 2022, when 37.6% was renewable-powered. 

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Iberdrola added that popular platform Ethereum switched to a processing system that resulted in a nearly 100% drop in energy use. Other tech companies, such as Meta, are investing in renewables to offset energy demand for computing, which is expected to increase by 165% in the coming years because of artificial intelligence demands, per Goldman Sachs. 

And Reuters reported that crypto miners are negotiating with Brazilian power providers to tap excess renewable energy there as another cleaner step that supports sustainable energy. 

But more progress is needed to limit planet overheating.

Informed investors can help to keep tabs on the crypto industry and other energy hogs to make sure they maintain progress toward sustainable operations. So-called "green" 401(k)s are a great way to invest in companies that provide yields on par with traditional options but with businesses that share your passion for the planet. 

Watchdogs are important because more computers will soon be working on advanced financial and AI work orders. 

For Finn's part, he sees digitization, blockchains, and other technologies "significantly" disrupting wealth management, per CNBC. 

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