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SINGAPORE – The largest bank in Southeast Asia, DBS, will launch a digital currency exchange that will allow investors to trade cryptocurrencies and companies to raise funds through the tokenization of assets.
The cryptocurrency exchange is expected to start next week, while the securities platform will be established in the coming months.
The blockchain-based DBS Digital Exchange will allow institutional and accredited investors to access an integrated ecosystem of tokenization, trading and custody of digital assets.
It will provide 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.
The service will also allow spot exchanges between four fiat currencies (Singapore dollar, US dollar, Hong Kong dollar, and Japanese yen) and four established cryptocurrencies: Bitcoin, Ether, Bitcoin Cash, and XRP.
It will also provide digital custody services to hold cryptographic keys that control digital assets on behalf of clients.
Singapore Exchange will have a 10 percent stake in DBS Digital Exchange.
The bank has received approval in principle from the Monetary Authority of Singapore for the DBS Digital Exchange to operate organized markets for assets such as stocks, bonds and private equity funds.
DBS head Piyush Gupta said that the bank’s size and capabilities allow it to generate volume and liquidity, and scale the exchange in a way that is difficult for custom digital exchanges.
He added that the launch of the exchange is an important step for DBS, as it presents a great opportunity for the bank to increase its presence in a large market.
“In recent years, the private equity market has grown exponentially and more companies prefer to stay private than go public,” Gupta said on Thursday (December 10).
“Now a large part of the funding is being raised in Asia, and the growth of private capital here is much faster than in other parts of the world. The fact that there is a lot of private capital lends itself to the possibility of monetization and create liquidity in it, “he said.
The global daily trade value on the world’s digital exchanges ranged from $ 50 billion (Singapore $ 67 billion) to $ 100 billion last year.
This is not DBS’s first foray into digital assets. In May, it joined the local blockchain trade finance network Contour, which digitizes global business processes like creating, exchanging, approving, and issuing letters of credit.
Last year, it also launched its first multi-tiered financing facility on a blockchain logistics platform to help small and medium-sized businesses in China gain faster access to trade financing.
SGX-backed digitized securities platform iSTOX welcomed DBS’s entry into the digital assets space.
Choo Oi Yee, its chief commercial officer, said: “With adoption increasing globally, we expect to see more institutional players turning to digitized securities as their primary mode of issuing new stocks and bonds, and more investors building portfolios consisting of diversified digitized securities. investment products “.
James Gillingham, Co-Founder and CEO of local crypto brokerage firm Finxflo, said: “While some may argue that the entry of institutional players into cryptocurrency trading may outpace existing exchanges over time, we believe there are multiple businesses crossed synergies to explore “.
For example, existing crypto exchanges can share their innovative technology solutions and market insights given their increased exposure to crypto trading, he said, while traditional financial institutions can lend their expertise in building secure platforms that comply with regulations. national.
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