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Bloomberg
DBS Group Holdings Ltd will set up a digital exchange for cryptocurrencies for firms and wealthy clients, while allowing fund raising via asset tokenisation on a platform run by the largest bank in Southeast Asia.
The planned setup is in partnership with Singapore Exchange Ltd, which will hold 10% in the new bourse, the Singapore-based lender said in an exchange filing. The new services include asset tokenisation, secondary trading of digital assets including Bitcoin, and custody services, DBS said.
The Monetary Authority of Singapore, the central bank, gave an in-principle approval to the new bourse to trade assets from shares, bonds and private-equity funds, the bank said.
Such regulatory blessing allows DBS to be among a handful of major banks to dabble in the crypto industry.
While crypto is gaining institutional acceptance, the asset class still sees occasional cyber hacks and is still seen by many as associated with illicit fund flows.
“The time has come, the time is right for this industry to increasingly find partnership and sponsorship from the formal banking sector,†DBS Chief Executive Officer Piyush Gupta told a media briefing following the announcement. Trading will start as early as next week, he said.
The bank has “robust governance and controls†to monitor and prevent financial crime, he said.
Digital currencies have gained popularity this year as prices soar. Central banks from China to Europe to the US are studying whether to create their own versions of digital currencies. Bitcoin is up about 150% and Ether has more than tripled since the start of the year. Meantime, institutions and investors are rapidly jumping into the space.
DBS’s move into the crypto space is “significant because we are now seeing the complete blurring of lines between conventional financial services provider and the digital currency/ securities blockchain world, which was previously seen to be an alternate universe,†said lawyer Nizam Ismail, who runs Singapore-based Ethikom, a consultancy firm for compliance.
Standard Chartered Plc, which has substantial presence in Singapore, earlier this week agreed to start a cryptocurrency custodian for institutional investor in partnership with Northern Trust Corp Julius Baer Group Ltd, the Zurich-based private bank, is partnering with startup SEBA Crypto AG to provide its wealthy clients with digital asset solutions and plans to extend the bank’s service into storage, transaction and investments in such assets.
The DBS Digital Exchange will be for institutional investors and qualified individuals, including clients of its DBS Vickers securities unit and its private bank. It will offer exchange services between Singapore, US and Hong Kong dollars, as well as the yen, and Bitcoin, Ether, Bitcoin cash and XRP.