DBS, Singapore's largest bank, is launching over-the-counter Bitcoin and Ethereum options trading for its institutional and accredited wealth clients in Q4 2024.
DBS’s New OTC Services
Singapore's largest bank, DBS, is set to expand its digital asset offerings by launching over-the-counter (OTC) options and structured notes linked to Bitcoin and Ethereum. This move, expected to be available to the bank's institutional and accredited wealth clients in the fourth quarter of 2024, marks DBS as the first Asian-headquartered bank to introduce financial products directly tied to the value of these leading cryptocurrencies.
New Service for Institutional Clients
The bank's recent press release indicated that this development aims to provide institutional investors with more sophisticated options for digital asset exposure. Eligible clients will now be able to diversify their crypto portfolios through tailored Bitcoin and Ethereum options, complementing the existing cryptocurrency trading and security token services offered on the DBS Digital Exchange (DDEx).
These OTC options will allow investors to hedge against the notorious volatility in the crypto markets. By entering into contracts whose value is derived from the price movements of Bitcoin and Ethereum, traders can opt to buy or sell these assets at a predetermined price, thereby offering a potential risk management tool in their investment strategies.
Strategic Move to Meet Growing Demand
Jacky Tai, Group Head of Trading and Structuring at DBS, emphasized the bank's response to the increasing demand for digital assets among professional investors.
Tai noted,
"Professional investors are increasingly allocating to digital assets in their portfolios. Now, our clients have an alternative channel to build exposure to the asset class and incorporate advanced investment strategies to better manage their digital asset portfolios."
DBS's foray into crypto-linked financial products follows a broader trend of major financial institutions embracing digital assets as a legitimate investment class. The bank's strategy aligns with the growing appetite for cryptocurrency investment options among institutional investors in Asia.
DBS’s Continued Involvement in Crypto
DBS is not new to the cryptocurrency sector. Since launching its native exchange DDEx in 2020, the bank has allowed clients to trade spot cryptocurrencies.
The launch of these new offerings comes amidst significant growth in the cryptocurrency market, with the bank reporting a nearly 50% increase in total crypto market capitalization during the first five months of 2024. The value of digital assets traded on DDEx tripled during this period compared to the same timeframe in 2023, with a 36% growth in active trading clients.
In line with its expanding digital asset portfolio, DBS also initiated a treasury tokens pilot project in August 2024 in collaboration with Ant International, aiming to establish an EVM-compatible, permissioned blockchain network.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
