Wall Street giant Morgan Stanley has launched a “digital asset lab” to test cryptocurrency products, according to a Bloomberg report published on Tuesday.

The report said the bank is using the lab to trial a range of products, including stablecoins, tokenized assets, and decentralized finance applications. Stablecoins are crypto tokens designed to hold a steady value against a reference asset such as the U.S. dollar, while tokenization refers to representing traditional financial instruments as digital tokens on a blockchain.

Citing an interview with Megan Brewer, head of firmwide market innovation and labs at the bank, Bloomberg reported that the lab gives Morgan Stanley a “secure, compliant and segregated environment to be able to test and explore some of these new areas of digital assets.”

The report added that the lab’s team is working to test products including tokenized deposits, central bank digital currencies, and tokenized money market funds. According to the report, Morgan Stanley operates a number of so-called labs dedicated to testing out new products. Testing grounds like these allow banks to evaluate how new products work in practice before any decision on whether to offer them to customers.

Morgan Stanley is one of many banks delving deeper into the crypto world. The traditional finance titan became the first bank to debut a bitcoin exchange-traded fund in April. The fund, the Morgan Stanley Bitcoin Trust, now manages over $871 million in assets, according to its website.

The bank has been making significant crypto moves for several years now. Back in 2021, it began offering wealthy clients exposure to bitcoin via funds such as those by Galaxy Digital.

Last year, the bank’s CEO and Chairman, Ted Pick, said Morgan Stanley was working with regulators to determine how it could offer crypto products safely. Also in April, the bank’s head of digital assets, Amy Oldenburg, said that client education — not product design — is the central challenge facing Bitcoin adoption. Taken together, the lab and the executives’ comments point to a cautious approach: building and testing digital asset products internally while the regulatory groundwork for client offerings is still being worked out.

Morgan Stanley is not alone in the effort. Top banks worldwide are working on offering products that use Bitcoin’s underlying technology. These products include everything from tokenized equities and stablecoins to bitcoin custody and trading platforms. The breadth of that work shows how digital assets have moved from the periphery of Wall Street into mainstream product development at major banks.

This post first appeared on Bitcoin Magazine and was written by Mathew Di Salvo.