Southeast Asia’s biggest bank, DBS Group Holdings, is ready to launch an exchange for cryptocurrencies that will provide trading, custody, and tokenization services to institutional and accredited investors.
The Singapore exchange will have a 10% stake in the DBS’s digital exchange.
The Monetary Authority of Singapore has given in-principle approval to the new exchange to trade assets from bonds, shares, and private-equity funds, the bank said. DBS Chief Executive Piyush Gupta said,
“I believe that the time is right for this (digital assets) industry to increasingly find partnership and sponsorship from the formal banking sector.”
“There are thousands of different coins today being traded on different exchanges, and increasingly you are beginning to find that they are forming an important part of the asset allocation of wealth and private investors.”
In Nov. 2017, David Gledhill, chief information officer at DBS, called Bitcoin “a Ponzi scheme.”
The exchange initially supports trading of Bitcoin (BTC), Ethereum (ETH), XRP, Bitcoin Cash (BCH) against four fiat currencies: SGD, USD, HKD, and JPY. These four crypto assets account for 70% to 80% of global crypto trading volume, said the bank adding, the trading activity on the exchange would start next week.
The DBS Digital Exchange will also be using blockchain technology to provide a fundraising platform through tokenization, said the bank in a statement. Tokenization involves converting the rights to an underlying asset such as shares of an unlisted company and private equity funds into digital form, which is then eligible for trading. Gupta said,
“We are on the cusp of a massive tokenization and therefore you’ll find tokenization of all kinds of assets around the world and I think more and more exchanges will start dealing with tokenized assets.”
Earlier this week, Standard Chartered also said it would start a crypto custodian for institutional investors in partnership with Northern Trust Corp. The bank has a substantial presence in Singapore.