Singapore’s top lender DBS is launching its own crypto asset exchange, six weeks after it accidentally leaked news of its foray into digital assets.
English-language Chinese news outlet South China Morning Post reported on Dec. 10 that DBS chief Piyush Gupta claims that this will be the world’s first cryptocurrency exchange backed by a traditional bank.
Still, as Modern Consensus reported, Russian state-owned energy firm’s Gazprombank also announced plans to facilitate the exchange of top cryptocurrency Bitcoin (BTC) at the end of October.
DBS’ crypto asset trading platform will support the trading of bitcoin, ether (ETH), XRP and bitcoin cash (BCH) against the yen, and U.S., Singapore, and Hong Kong dollars. The platform could launch as soon as next week. It is 10% owned by Singapore Exchange.
The new crypto trading platform will be accessible directly only to financial institutions and market makers. Retail customers will be able to access it via DBS Vickers Securities or DBS Private Bank, but only if they are accredited investors whose annual income is at least 300,000 Singapore dollars or $224,000—roughly what is required for U.S. accredited investors.
The upcoming crypto exchange already received approval from Singapore’s central bank to operate organized markets for assets such as shares, bonds, and private equity funds. Those authorizations will be leveraged to conduct security token offerings, allowing firms to raise capital by digitizing their financial assets such as shares in unlisted companies, bonds, and private equity funds.
Gupta noted that the platform will manage the issuance, investing, and trading of security tokens. He claimed that crypto exchanges currently present on the market “tend to lack the possibility that being part of a banking group can bring to this activity.”
Gupta explained that DBS brings a large origination capability to the crypto platform thanks to its capital markets presence and a substantial distribution capability including its private bank, wealth base, and institutional clients. Furthermore, the firm’s experience in managing its custody house was leveraged in building a crypto custody service. He concluded:
“Leveraging the power and strength of DBS bank allows us to build volume, liquidity, and scale in this exchange in a manner which a lot of other bespoke exchanges find difficult to do.”
Crypto and traditional finance merge
This is the latest development that seems to be part of a broader trend of adoption of crypto assets by traditional finance institutions merging the two industries. Other than Gazprombank and DBS, payment processing giants PayPal and Visa also announced their own crypto asset initiatives recently.
More precisely, last month PayPal launched its crypto exchange service and announced that cryptocurrencies will be spendable at its network of 28 million merchants. Visa, on the other hand, partnered last week with Circle Internet Financial, the firm behind the USD Coin (USDC) stablecoin. It intends to integrate the stablecoin into payment cards.
While traditional finance is moving closer to the cryptocurrency space, crypto firms are also approaching their traditional counterparts. As Modern Consensus reported in mid-September, major cryptocurrency exchange Kraken obtained a bank charter approval in the state of Wyoming, becoming a special-purpose depository institution. Similarly, blockchain-enabled lending firm Figure Technologies also became a bank in early November.