Morgan Stanley launches Digital Asset Lab to test stablecoins and DeFi

Morgan Stanley has established a Digital Asset Lab to test stablecoins, tokenized financial products and decentralized finance applications within its business.

Bloomberg reported on Sep. 29 that the lab is part of Morgan Stanley’s existing network of innovation labs. Employees can use it to examine blockchain applications without testing them on the bank’s core systems.

Megan Brewer, who leads market innovation and labs at Morgan Stanley, told Bloomberg that the work will cover tokenized deposits, central bank digital currencies, money-market funds and DeFi vaults. Among the questions for the bank is how software could carry out investment strategies around the clock.

The lab adds a research setting to a business that already gives clients several ways to access digital assets. Its tests may cover different parts of a transaction, from the form money takes when it moves to how an investment is recorded or managed.

Morgan Stanley’s Digital Asset Lab will test several forms of digital money

A tokenized deposit represents a claim on money held at a bank, while a stablecoin is issued against a separate pool of backing assets. Brewer included both types of digital money among the subjects the firm plans to examine, according to Bloomberg.

Money-market funds and DeFi vaults raise a different set of questions for the lab. A fund can hold short-term assets under an established investment structure; a DeFi vault uses software to carry out actions according to its design. Bloomberg reported that Morgan Stanley is interested in whether such tools could automate investment strategies at any hour.

The tests sit alongside products Morgan Stanley has already brought to market. In April, Morgan Stanley Investment Management launched the Stablecoin Reserves Portfolio, or MSNXX, within its Institutional Liquidity Funds trust. The firm described it as a government money-market fund designed for the reserve needs of payment stablecoin issuers under the U.S. GENIUS Act.

As previously covered by crypto.news, the portfolio holds cash, short-dated U.S. Treasury securities and overnight repurchase agreements backed by Treasurys. Morgan Stanley said investors other than stablecoin issuers can also hold shares. The existing portfolio manages reserve assets; Brewer’s comments concern research into additional uses of digital money and investment software.

E*TRADE clients can already trade three cryptocurrencies

Morgan Stanley’s E*TRADE platform completed its rollout of Bitcoin, Ether and Solana trading for eligible clients in July. The service lets them buy, sell and hold the assets through brokerage accounts, with Zerohash providing the underlying trading and custody infrastructure.

According to the bank’s July E*TRADE rollout details, each transaction carries a 0.50% fee. E*TRADE also said it expected to add transfers, which would let supported customers move crypto into and out of their accounts. The announcement did not give a firm date for that feature.

The platform gives eligible U.S. brokerage customers direct access to the three assets. Morgan Stanley also offers exchange-traded products for investors seeking exposure through fund shares. Those routes serve different purposes: a customer trading crypto on E*TRADE holds the supported asset through the service’s custody arrangement, while an exchange-traded product is bought and sold as a security.

Morgan Stanley said in July that it expected to move E*TRADE’s crypto service to Morgan Stanley Digital Trust, its proposed national trust bank, later in 2026. The plan concerns the infrastructure behind an existing customer service. The Digital Asset Lab, by comparison, is testing possible applications that Brewer described to Bloomberg.

U.S. investors can access Morgan Stanley’s crypto funds

The Morgan Stanley Bitcoin Trust began trading on NYSE Arca in April under the ticker MSBT. Its 0.14% annual sponsor fee gave U.S. investors another listed option for Bitcoin exposure when the fund launched. The product had attracted $103 million in net inflows by April 15, according to earlier MSBT coverage citing Farside Investors data.

Morgan Stanley Investment Management then launched the Morgan Stanley Ethereum Trust, MSSE, and Morgan Stanley Solana Trust, MSOL, on NYSE Arca in July. Both seek to track their respective digital assets and have a 0.14% sponsor fee, according to the firm’s launch announcement. Morgan Stanley said staking forms part of the products’ structures.

The three exchange-traded products, direct ETRADE trading and MSNXX involve different customers and assets. MSBT, MSSE and MSOL offer market exposure through listed shares; ETRADE supports direct trades in selected cryptocurrencies; and MSNXX is a money-market portfolio intended primarily for institutions holding stablecoin reserves.

The distinctions matter to U.S. customers considering what the bank currently offers. A lab test does not itself give brokerage clients access to tokenized deposits or DeFi vaults. Brewer described those as subjects for investigation, while the trading service and investment funds are existing offerings.

Morgan Stanley is also building custody infrastructure

Morgan Stanley’s proposed Digital Trust bank is another part of its work on digital assets. In July, the bank said the planned entity would eventually take over the crypto service that Zerohash currently supports for E*TRADE. That proposed move remains separate from the lab’s research into deposits, funds and DeFi applications.

Zerohash supplies crypto infrastructure to E*TRADE while pursuing its own national trust bank charter. An August filing update showed that the Office of the Comptroller of the Currency had recorded Zerohash’s revised application after returning an earlier version. Morgan Stanley’s proposed trust bank and Zerohash’s application are separate regulatory matters.

For now, E*TRADE’s announced transfer feature remains pending. The brokerage said it expected to add transfers later in 2026 so eligible clients could move supported crypto assets into and out of their accounts.