In Fourth Quarter of 2024, DBS Bank of Singapore, is set to launch over-the-counter (OTC) cryptocurrency options and structured notes, targeting institutional investors and accredited wealth clients. This move makes DBS the first Asian bank to offer such products, which will include major cryptocurrencies like Bitcoin and Ethereum.
The decision comes as the cryptocurrency market continues to expand, with DBS noting a significant rise in market activity in the first half of 2024. The total market value of digital assets increased by nearly 50%, while active trading clients on the DBS Digital Exchange (DDEx) rose by 36%, and assets under custody surged by 80%. This development will provide professional investors with new tools for managing their exposure to digital assets through sophisticated investment strategies.
The new products will complement the existing digital asset services offered by DDEx, which already allows clients to trade cryptocurrencies and security tokens. With the introduction of OTC crypto options and structured notes, DBS clients will have additional methods for managing their digital asset portfolios, either through cash settlements or delivery of the underlying cryptocurrency, depending on market conditions.
Jacky Tai, Group Head of Trading and Structuring for Global Financial Markets at DBS, highlighted the increasing demand from professional investors for exposure to digital assets. “Our clients now have an alternative channel to build exposure to the asset class and incorporate advanced investment strategies to better manage their digital asset portfolios,” Tai said.
The expansion into crypto derivatives comes amid heightened regulatory scrutiny globally, particularly in the United States, where the U.S. Securities and Exchange Commission has ramped up enforcement activities in the crypto sector. Despite this, DBS remains committed to innovating within the digital asset space and providing ethical investment solutions.
DBS is not alone in this endeavor, as AsiaNext, a Singapore-based platform founded by SIX and SBI Digital Asset Holdings, also provides crypto derivatives for institutional clients. The launch of OTC crypto options at DBS further solidifies its leadership in the Asian digital asset market and could inspire other financial institutions in the region to follow suit.
