DBS will use a blockchain ecosystem to raise funds through asset tokenisation along with secondary trading of digital assets
Singapore-based DBS Bank has announced that it will launch DBS Digital Exchange, a members-only digital exchange which will use blockchain technology.
Through the digital exchange, institutional and wealthy investors can trade using fully integrated asset tokenisation, while fundraising can be done through asset tokensation, with secondary trading of digital assets using cryptocurrencies.
Singapore Exchange (SGX) will hold a 10% stake in the digital exchange. Both DBS and SGX have also agreed to explore new opportunities to deepen the liquidity, scale and growth of Singapore’s capital markets in the area of digital assets and digital currencies.
The announcement was made after the Monetary Authority of Singapore (MAS) had given an in-principle approval to DBS Digital Exchange as a Recognised Market Operator.
The approval allows the digital exchange to operate markets for assets such as shares, bonds and private equity funds.
DBS Group CEO Piyush Gupta said: “The exponential pace of asset digitalisation 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.
“DBS is committed to accelerating the development of a fully integrated ecosystem to facilitate this. We believe that this is the first of its kind integrated offering, which is differentiated in many ways.”
The DBS Digital Exchange will feature cryptocurrency trading that can facilitate spot exchange of flat currencies to cryptocurrencies and vice versa.
Initially, it will offer only four flat currencies, including SGD, USD, HKD, JPY and four cryptocurrencies namely Bitcoin, Ether, Bitcoin Cash and XRP.
It will develop an institution-grade digital custody solution to meet the demand for secure custodial services customised for digital assets.
A regulated platform will be developed for issuing and trading digital tokens backed by financial assets such as shares in unlisted companies, bonds and private equity funds.
SGX CEO Loh Boon Chye said: “We are excited to apply our strengths in market infrastructure and risk management to this venture. There are significant opportunities to bring trust and efficiency in price discovery to the global digital assets space.
“We look forward to working closely with DBS to advance Singapore’s standing as a multi-asset international financial centre.”