DBS Bank in Singapore Set to Introduce Bitcoin and Ethereum Options Trading
DBS Bank of Singapore is gearing up to introduce over-the-counter (OTC) crypto options trading and structured notes for institutional clients in the fourth quarter of 2024, as per a statement released on September 17. This strategic move positions DBS as the pioneer Asian-headquartered bank to provide financial instruments linked to the value of Bitcoin and Ethereum, the two leading digital assets by market capitalization. The bank specifies that these crypto options and structured notes products will exclusively cater to eligible institutional investors and accredited clients of DBS Private Bank and DBS Treasures Private Client.
The unveiling of these new products by the bank amplifies its existing crypto services offered through DBS Digital Exchange (DDEx). These fresh offerings offer clients enhanced avenues to interact with digital assets, enabling investors to potentially earn a yield on fiat currency or take possession of underlying crypto. Moreover, Bitcoin and Ethereum holders at DBS stand to gain additional advantages, such as the ability to hedge against market fluctuations and potentially generate returns through diverse options strategies.
Jacky Tai, the head of trading and structuring at DBS Group, emphasized the escalating demand for digital assets among professional investors and elaborated on how these new products broaden the bank’s digital asset services. Tai highlighted that these financial products extend the bank’s value proposition by granting clients trusted institutional-grade access to the digital asset ecosystem, providing an alternative channel for clients to build exposure to the asset class and incorporate advanced investment strategies to enhance the management of their digital asset portfolios.
For instance, a concerned client observing Bitcoin’s price swings could opt to purchase a put option. This strategy allows them to sell Bitcoin at a predetermined price in the future, even if the market price drops below that level. Furthermore, DBS reported a substantial surge in crypto trading volumes on its digital exchange, DDEx. In the initial five months of 2024, trading volume for digital payment tokens on DDEx tripled compared to the same period in 2023. The number of active trading clients surged by 36%, while digital assets under custody soared by 80%. This growth was attributed to a net inflow of deposits from clients seeking secure, bank-grade platforms for the custody and trading of digital assets.
