Yes, the good news is that PS5 can play 4K UHD Blu-rays. That means you'll be able to watch 4K Ultra-HD movies in full 2160p on the console. However, it's worth mentioning, that the PS5 Digital Edition does not include a disc slot, and therefore can't play Blu-rays at all. You'll need to purchase the standard PS5 model in order to enjoy 4K UHD Blu-rays.
In addition to 4K UHD Blu-rays, the PS5 can also play standard Blu-rays in 1080p and traditional DVDs. Again, you'll need to own the PS5 with a disc slot in order to take advantage of physical media.