DBS Bank plans to introduce over-the-counter crypto options trading and structured notes for eligible institutional and wealth clients.

According to DBS, it is the first bank in Asia to offer financial products linked to the value of Bitcoin and Ethereum, the two most prominent cryptocurrencies.

Currently, DBS clients can trade digital assets through cryptocurrency and security tokens on the DBS Digital Exchange (DDEx).

Starting in the fourth quarter of 2024, eligible clients will have additional options to gain exposure to these assets through options trading and structured notes.

These products may provide yield on fiat currency or allow clients to take delivery of the underlying cryptocurrency, depending on the product structure and market movements.

The introduction of these products coincides with a 50% increase in cryptocurrency market capitalisation in the first five months of 2024.

DDEx has also seen substantial growth during this period, with a 36% increase in active trading clients and an 80% surge in digital assets custodied with DBS in Singapore-dollar terms. The value of assets traded on DDEx has nearly tripled.

DBS said that it will adhere to industry best practices for safeguarding clients’ digital assets, using institutional-grade cold wallets separate from DDEx for custody.

The new offerings will be available only to eligible institutional clients and accredited clients of DBS Private Bank and DBS Treasures Private Client.

While broadening access to the cryptocurrency market, DBS advises clients to carefully assess their investment goals and risk tolerance before engaging with these products.

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.”

Featured image credit: Edited from Freepik