Morgan Stanley is reportedly preparing to offer bitcoin swap trading for clients, joining other top banks in a sectorwide effort to explore digital currencies.

The bank will provide derivatives that grant investors exposure to the performance of the world's largest cryptocurrency, Bloomberg News reported, citing sources familiar with the matter.

Traders will have the choice to go either long or short using so-called price return swaps; Morgan Stanley will charge a spread for each transaction, the source told Bloomberg.

Trading will begin once an internal approval process is complete and there is proven client demand, the report said.

A spokesman for Morgan Stanley wasn't immediately available for comment.

News of Morgan Stanley's foray into cryptocurrency assets comes as other Wall Street titans start similar campaigns into digital derivatives. Goldman Sachs, for example, clarified last week that the bank is working on a type of derivative for bitcoin called nondeliverable forwards due to client demand.

Goldman Sachs Chief Financial Officer Martin Chavez said that the assets will be settled in U.S. dollars and that the reference price is the bitcoin-dollar price as established by a set of exchanges.

The Wall Street giant has been debating the launch of some sort of cryptocurrency option over the last 12 months, but it's never been quite clear just what the bank had in store.

Wall Street's burgeoning interest in crypto comes despite a yearlong slide in the value of bitcoin, which has lost more than half its value over the last 12 months. That may help explain why none of the major U.S. banks has made a more forceful entry into the space, opting instead for the comparative safety of regulated futures markets.

— CNBC's Kate Rooney contributed reporting.