Singapore’s largest bank, DBS, has announced a significant expansion of its digital asset offerings, aimed at institutional investors and accredited wealth clients. From the fourth quarter of this year, the bank will introduce over-the-counter (OTC) cryptocurrency options trading and structured notes, offering a wider array of opportunities for clients to engage with the growing digital asset market.
DBS, which operates its own digital exchange, DDEx, made the announcement on September 17. This development positions DBS as the first bank headquartered in Asia to provide financial products directly linked to the prices of Bitcoin and Ether, the two most valuable cryptocurrencies by market capitalization. These products will allow investors to potentially earn yield on fiat currencies or cryptocurrencies, depending on the structure of the products and the fluctuations in cryptocurrency prices.
Clients who hold Bitcoin and Ether with DBS will have the opportunity to hedge their positions against market volatility. This is particularly relevant in the notoriously unpredictable world of digital currencies. Through various options structures, investors may also earn additional yield. One such structure includes the use of a put option, which gives investors the right to sell Bitcoin at a pre-determined price on a future date, even if the price of Bitcoin drops below that fixed price. This allows clients to manage the risks associated with the currency’s volatility.
Jacky Tai, DBS’s group head of trading and structuring for global financial markets, explained that professional investors are increasingly incorporating digital assets into their portfolios. “Our new offerings are a natural extension of our commitment to provide institutional-grade access to the digital asset ecosystem,” Tai said. The move reflects a growing demand for secure, regulated avenues through which large investors can participate in the rapidly expanding digital currency market.
The timing of DBS’s announcement coincides with a period of remarkable growth in the cryptocurrency market. DBS cited data showing that the market capitalization of cryptocurrencies surged by an estimated 50% in the first five months of 2024 alone. Reflecting this trend, the value of digital assets traded on DDEx almost tripled in Singapore dollar terms during the same period compared to the previous year.
The bank also reported a substantial increase in client activity, with the number of active trading clients on DDEx growing by 36%. Meanwhile, the amount of digital assets held by DBS on behalf of its clients surged by over 80% in Singapore dollar terms.
DBS’s digital exchange has been a focal point of its push into the crypto space. Since its inception, DDEx has provided institutional and accredited investors with access to cryptocurrency trading, tokenized assets, and other blockchain-driven services. The addition of these new financial products, which include the ability to hedge cryptocurrency positions, further cements DBS’s role as a leading player in Asia’s digital asset sector.
The bank’s expansion of crypto-related offerings reflects the ongoing mainstreaming of digital currencies within the financial sector. As institutional and high-net-worth clients increasingly seek exposure to cryptocurrencies, regulated financial institutions like DBS are stepping in to provide secure, compliant pathways for investment.
With demand for digital assets continuing to grow, DBS’s latest offerings are expected to draw significant interest from its wealthiest clients, further boosting the bank’s presence in the rapidly evolving world of digital finance.
