State Street, a Boston-based asset management and banking giant, is exploring creating stablecoins and tokenized deposits to settle transfers on blockchain rails, Bloomberg reported Wednesday citing a source familiar with the matter.

The bank also weighs participating in "digital-cash consortium efforts" and is "looking at settlement options" via Fnality International, a fintech firm in which State Street has invested according to the report.

The report comes as State Street is increasing its presence in the digital asset space. State Street Global Advisors, the investment management arm of the company, also inked a deal with crypto investment firm Galaxy (GLXY) to develop crypto trading products, CoinDesk reported in late June based on regulatory filings. The Information reported early last month that State Street was rebuilding its digital asset division only six months after cutting the team, with plans for offering crypto custody services.

Traditional finance heavyweights are getting increasingly involved in tokenization of traditional financial assets, or real-world assets (RWA) by placing bonds, funds or credit on blockchain rails. They do so to gain operational benefits such as increased efficiency, faster and around-the-clock settlements and lower administrative costs. Stablecoins are blockchain-based cryptocurrencies with a pegged price to an external asset. Most stablecoins are pegged to the U.S. dollar and are widely used as a tokenized version of cash.

Asset management giant BlackRock, which now offers the largest spot bitcoin (BTC) exchange-traded fund, introduced its first tokenized money market fund on the Ethereum (ETH) network with several decentralized finance (DeFi) protocols building on it. Global bank JPMorgan developed its private blockchain Onyx with its JPM Coin, a private digital version of the U.S. dollar.