Banking Capital markets News

MAS greenlights DBS Digital Exchange. SGX invests

DBS bank

Today Singapore’s DBS Bank confirmed it has approval from the Monetary Authority of Singapore (MAS) to launch the DBS Digital Exchange for tokenized assets. Institutional and accredited investors are the target clients with both cryptocurrencies and other digital assets to be offered. Additionally, SGX is to take a 10% stake in the Digital Exchange.

The platform’s three aspects are security token offerings (STOs), a cryptocurrency exchange, and digital asset custody.

STOs will encompass tokenized shares in unlisted companies as well as bonds and private equity funds. These are the asset classes enabled by the MAS Recognised Market Operator license, which is ‘in-principle’. That designation means that if the DBS Digital Exchange were to become foreign-owned that licensing could be revoked.

“The exponential pace of asset digitalisation provides immense opportunities to reshape capital markets,” said Piyush Gupta, Group CEO, DBS. “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 initial cryptocurrencies are Bitcoin, Ether, Bitcoin Cash and XRP, which can be traded against fiat currencies SGD, USD, HKD, JPY. As we previously reported, this means there is no need to use a stablecoin such as the rather risky Tether popular in the crypto sector. However, as a result of using bank money, the trading hours will be restricted.

Both DBS and SGX have extensive activities in the blockchain sector. It was recently revealed that DBS and JP Morgan are working together with Temasek on a multi-currency payments system leveraging digital currencies.

“We are excited to apply our strengths in market infrastructure and risk management to this venture,” said Loh Boon Chye, CEO of SGX. “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.”

Institutional interest in cryptocurrencies and digital assets is ramping up. So far this week, SIX and Japan’s SBI announced a digital asset joint venture, also based in Singapore. Standard Chartered and Northern Trust confirmed a U.K. joint venture for cryptocurrency custody, Zodia. And BBVA is starting trading and custody of digital assets in Switzerland.