Key Points
- DBS Bank is set to introduce crypto options and structured notes for institutional and accredited clients.
- The Singapore-based bank will be the first in Asia to offer such products, with a planned launch in Q4 2024.
DBS Bank, a major banking institution, is preparing to launch cryptocurrency options and structured notes. These products will be available to institutional and accredited clients, marking the bank as the first in Asia to offer such services.
DBS Bank’s Crypto Initiative
The bank’s plan to start over-the-counter cryptocurrency options trading and structured notes was announced with a target start date in the fourth quarter of 2024. The move is aimed at professional investors who are increasingly incorporating digital assets into their portfolios.
Jacky Tai, DBS group head of trading and structuring, noted that the new venture would provide clients with an alternate channel for gaining exposure to digital assets. It would also allow for the incorporation of advanced investment strategies to better manage their digital asset portfolios.
DBS Digital Exchange and Crypto Options
Currently, DBS Bank allows clients to trade crypto and security tokens via its DBS Digital Exchange. The new initiative will enable clients to gain exposure to crypto through options trading and structured notes. This could potentially allow for yield on fiat or delivery of the underlying cryptocurrency.
For example, a client looking to manage Bitcoin’s inherent volatility could buy a put option. This would give 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.
Despite the bank’s deepening involvement in web3, crypto options and structured notes will only be available to eligible institutional investors and accredited clients of DBS Private Bank and DBS Treasures Private Client.
In recent developments, DBS launched a blockchain-based solution in late August. This solution, which utilizes smart contracts, aims to streamline government grant disbursements. The bank’s pilot project demonstrated how these programmable grants could enhance transparency and efficiency in the grant distribution process.
