DBS announced that it will set up a digital exchange, enabling institutional investors and accredited investors to tap into a fully integrated tokenization, trading and custody ecosystem for digital assets.
Singapore Exchange (SGX) will take a 10% stake in the DBS Digital Exchange. Both parties will explore opportunities to deepen the liquidity, scale and growth of Singapore’s capital markets in the growing area of digital assets and digital currencies.
Piyush Gupta, Group CEO, DBS, said, “The exponential pace of asset digitalization provides immense opportunities to reshape capital markets. For Singapore to become even more competitive as a global financial hub, we have to prepare ourselves to welcome the mainstream adoption of digital assets and currency trading.”
With the DBS Digital Exchange, DBS will leverage blockchain technology to provide an ecosystem for fund raising through asset tokenization and secondary trading of digital assets including cryptocurrencies. This includes:
- Security Token Offerings – A regulated platform for the issuance and trading of digital tokens backed by financial assets, such as shares in unlisted companies, bonds and private equity funds.
- Digital Currency Exchange – Cryptocurrency trading that will facilitate spot exchanges from fiat currencies to cryptocurrencies and vice versa. The DBS Digital Exchange will offer exchange services between four fiat currencies (SGD, USD, HKD, JPY), and four of the most established cryptocurrencies, namely Bitcoin, Ether, Bitcoin Cash and XRP.
- Digital Custody Services – An institution-grade digital custody solution to meet the increasing demand for secure custodial services tailored for digital assets under their prevailing regulatory standards. Leveraging on DBS’ experience in providing world-class custody services for conventional assets, DBS’ digital custody services provide the custody of cryptographic keys that control digital assets on behalf of clients.
The announcement follows the in-principle approval by the Monetary Authority of Singapore to recognize DBS as a Recognized Market Operator, allowing it to operate organized markets for assets such as shares, bonds and private equity funds.
It was estimated that in 2019, the global daily trading value on the world’s digital exchanges ranged from $50 billion to $100 billion.
Institutional and accredited investors, as members of the exchange, will benefit from DBS Group’s capabilities in multiple areas. These include:
Loh Boon Chye, CEO of SGX, said, “There are significant opportunities to bring trust and efficiency in price discovery to the global digital assets space.”
Deep expertise in deal origination, leadership in the capital markets space across key markets in Asia and a bank wide corporate network, which the DBS Digital Exchange can tap on as potential issuers
Established investor base and distribution network through DBS Private Bank and DBS Vickers, enabling the DBS Digital Exchange to tap on a large and ready pool of potential investors
Extensive experience in providing secure and reliable custodial services, which will be extended to provide institutional-grade custody for digital assets with robust cybersecurity controls
Robust governance and controls – where proprietary artificial intelligence and machine learning solutions applied by DBS complement risk and control processes to monitor and prevent financial crime, credit risks and other potential cyber risks.
Digital capabilities underpinned by a strong digital infrastructure to accelerate the development of a fully integrated digital asset ecosystem.