Morgan Stanley has created a Digital Asset Lab where teams can try out stablecoins, tokenization and decentralized finance tools in isolation before any of them is allowed to connect to the bank’s systems, two executives told Bloomberg in a story published on Tuesday.
The lab sits inside the firm’s existing network of innovation labs, which to date have handled work on electronic trading, cybersecurity and machine learning. Megan Brewer, who leads market innovation and labs at Morgan Stanley, said up to 270 projects a year pass through the labs.
“It’s where technology earns the right to scale at the firm,” Brewer said.
The labs cover 20,000 square feet in total, in locations that include New York, Glasgow and Bangalore.
Amy Oldenburg, who heads the bank’s digital-asset team, said the new lab will provide “a secure, compliant and segregated environment to be able to test and explore some of these new areas of digital assets.” Her team also intends to trial tokenized money market funds, tokenized deposits and central bank digital currencies, according to Bloomberg.
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Why DeFi Vaults Made the List
Oldenburg singled out DeFi vaults as a particular focus. A vault is an onchain pool that takes in deposits, frequently stablecoins, and uses smart contracts to allocate that capital across decentralized markets according to a set strategy. Depositors receive a token that tracks their share.
For an asset manager, a vault works much like a fund, with parts of managing the portfolio and running the fund handled by code.
“There is a very reasonable path to see vaults being part of the future going forward,” Oldenburg told Bloomberg. She added that the bank needs to understand how the technology works, saying “it is too nascent, we cannot put the rest of the platform at risk.”
Morgan Stanley’s Year in Crypto
In February, Morgan Stanley Digital Trust applied to the Office of the Comptroller of the Currency (OCC) for a national trust bank charter that would cover digital asset custody, and the regulator granted it preliminary conditional approval in June. In April, the firm launched MSBT, a spot bitcoin ETF charging a 0.14% fee.
E*Trade then rolled out spot trading in bitcoin, ether and solana on July 16 through a partnership with zerohash.
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