DBS to launch crypto options trading and structured notes for institutional investors and wealth clients
Singapore.17 Sep 2024
First Asian-headquartered bank to offer financial products whose value is linked to Bitcoin and Ethereum prices
Broadens access to the asset class for eligible clients while hedging against volatility and potentially earning yield
Singapore, 17 Sep 2024 - DBS today announced it will launch over-the-counter cryptocurrency options trading and structured notes for eligible institutional investors and accredited wealth clients. It is the first Asian-headquartered bank to offer financial products whose value is linked to the price of Bitcoin and Ethereum – the two largest cryptocurrencies by market capitalisation.
Currently, clients build their digital asset portfolios with DBS by trading cryptocurrencies and security tokens via DBS Digital Exchange (DDEx). From Q4 2024 onwards, eligible clients seeking to build exposure to the asset class may do so through options trading and structured notes. Depending on the product’s structure and cryptocurrency price movements, clients may earn yield on fiat or take delivery of the underlying cryptocurrency.
Eligible clients custodising Bitcoin and Ethereum with DBS may also hedge their positions against market volatility and potentially earn yield through various options structures. For instance, a client seeking to manage the inherent volatility of Bitcoin may buy a put option, which gives the client the right to sell Bitcoin at a fixed price at a future date, even if Bitcoin prices fall below the fixed price by that future date.
Jacky Tai, Group Head of Trading and Structuring, Global Financial Markets, DBS, said: “Professional investors are increasingly allocating to digital assets in their portfolios. Underpinned by DBS’ strong credit ratings and longstanding expertise in structuring solutions, these financial products are an expansion of the bank’s value proposition to provide clients trusted institutional-grade access to the digital asset ecosystem. 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.”
The launch of these products comes against an approximately 50% growth in the market capitalisation of cryptocurrencies in the first five months of 2024[1]. During this same period, DDEx reported that the value of digital assets traded on the exchange nearly tripled in Singapore dollar terms as compared to the same time in 2023. In addition, the number of active trading clients on DDEx grew 36%, while digital assets custodised with DBS surged over 80% in Singapore-dollar terms.
DDEx’s growth was driven by a net inflow of deposits from new and existing clients seeking safe-haven bank-grade platforms to custodise and trade digital assets. DBS adopts the industry best practice of custodising its clients’ digital assets within the bank using institutional-grade cold wallets, separate from DDEx.
Cryptocurrency options trading and structured notes will only be available to eligible institutional clients and accredited clients of DBS Private Bank and DBS Treasures Private Client.
About DBS
DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 15 consecutive years from 2009 to 2023.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets.
DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting businesses for impact: enterprises with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping underserved communities with future-ready skills and helping them to build food resilience.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com.
Currently, clients build their digital asset portfolios with DBS by trading cryptocurrencies and security tokens via DBS Digital Exchange (DDEx). From Q4 2024 onwards, eligible clients seeking to build exposure to the asset class may do so through options trading and structured notes. Depending on the product’s structure and cryptocurrency price movements, clients may earn yield on fiat or take delivery of the underlying cryptocurrency.
Eligible clients custodising Bitcoin and Ethereum with DBS may also hedge their positions against market volatility and potentially earn yield through various options structures. For instance, a client seeking to manage the inherent volatility of Bitcoin may buy a put option, which gives the client the right to sell Bitcoin at a fixed price at a future date, even if Bitcoin prices fall below the fixed price by that future date.
Jacky Tai, Group Head of Trading and Structuring, Global Financial Markets, DBS, said: “Professional investors are increasingly allocating to digital assets in their portfolios. Underpinned by DBS’ strong credit ratings and longstanding expertise in structuring solutions, these financial products are an expansion of the bank’s value proposition to provide clients trusted institutional-grade access to the digital asset ecosystem. 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.”
The launch of these products comes against an approximately 50% growth in the market capitalisation of cryptocurrencies in the first five months of 2024[1]. During this same period, DDEx reported that the value of digital assets traded on the exchange nearly tripled in Singapore dollar terms as compared to the same time in 2023. In addition, the number of active trading clients on DDEx grew 36%, while digital assets custodised with DBS surged over 80% in Singapore-dollar terms.
DDEx’s growth was driven by a net inflow of deposits from new and existing clients seeking safe-haven bank-grade platforms to custodise and trade digital assets. DBS adopts the industry best practice of custodising its clients’ digital assets within the bank using institutional-grade cold wallets, separate from DDEx.
Cryptocurrency options trading and structured notes will only be available to eligible institutional clients and accredited clients of DBS Private Bank and DBS Treasures Private Client.
Clients intending to trade in financial products with cryptocurrencies as underlying assets are reminded of the risks associated with such products and should carefully assess their investment objectives, risk appetite, financial situation and particular needs before making any investment decision.
[1] Source: Coinmarketcap
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About DBS
DBS is a leading financial services group in Asia with a presence in 19 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 15 consecutive years from 2009 to 2023.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets.
DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting businesses for impact: enterprises with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping underserved communities with future-ready skills and helping them to build food resilience.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com.