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DBS Bank's "grayscale" ambition

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Another heavyweight traditional industry giant enters the cryptocurrency field.

Original title: "DBS Bank's "Grayscale" Vision I Industry"

Original source: Blocklike

DBS The bank's latest announcement has brought digital currency trading and digital securities issuance to the fore again.

A number of scholars in the field of digital currency and investors in the industry have noticed that among the four currencies that DBS Bank’s digital trading platform provides for digital currency transactions, Singapore is included Yuan, U.S. dollar, Hong Kong dollar, Japanese yen. Through these four fiat currencies, DBS Bank's ambitions in the field of digital assets in Southeast Asia have been revealed.

The news of "DBS Bank announced the official launch of a digital trading platform" is called a positive signal, and it may also become a channel worth looking forward to.

Revisiting Digital Securities Offering (STO)

Singapore time December 10, 2020 , DBS Bank officially reported that DBS Bank announced the official launch of a digital trading platform, and will create a comprehensive digital asset tokenization, trading and custody ecosystem for institutional customers and qualified investors.

In the official announcement, DBS Bank said: Through this digital trading platform, the bank will use blockchain technology to provide digital assets including cryptocurrencies Asset tokenization and secondary market transactions form an ecosystem for fundraising, including:

Securitization Token Offering – Serves as a regulated platform for issuing and trading digital tokens backed by financial assets such as shares of unlisted companies, bonds and private equity funds.

Digital Currency Transactions - Cryptocurrency transactions that enable two-way spot exchange from fiat currencies to cryptocurrencies. The DBS digital trading platform will provide mutual exchange services between four currencies (SGD, USD, HKD, JPY) and four of the most established cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple).

Digital Custody Services - An institutional-grade digital custody solution designed to meet the growing demand for secure custody services for digital assets under current regulatory standards. DBS Digital Custody Services builds on its experience in providing world-class custody services for traditional assets, escrowing the cryptographic keys that govern digital assets on behalf of clients.

Among them, securitization token issuance (also known as digital securities issuance), which is the STO (Security Token Offering ).

Theoretically speaking, STO puts the token financing of blockchain projects in a legal and compliant framework. Under this framework, the issued ST has the nature of traditional securities. When Token meets the definition of securities, it will also be subject to the "Securities Law" of the local jurisdiction, which is a legal and compliant public offering of tokens.

Digital securities represent currency, digital assets, company shares, etc., and their underlying assets can be creditor's rights, equity, dividend rights, intellectual property rights, trust shares, and real assets such as gold and jewellery.

This kind of ST, which represents the real rights and interests, has become the main orientation of the digitization of traditional financial assets to some extent. Compared with stock issuance, programmable is one of ST's advantages. Due to the current regulatory situation, compliance issues have become a constraint for the development of the industry.

According to reports, at present, the Monetary Authority of Singapore has approved in principle the recognition of DBS Digital Exchange as a recognized market operator, allowing it to operate stocks, bonds and private equity funds Organized markets for assets such as

"Small Grayscale" in Southeast Asia?

Singapore dollars, US dollars, Hong Kong dollars, and Japanese yen are among the four legal currencies DBS uses in digital transactions. The tone of this structure is focused on Southeast Asia, with a stable structure and a clear purpose. Both the U.S. dollar and the Hong Kong dollar have a very strong linkage with Southeast Asian assets. At the same time, the Japanese yen has made a good supplement in terms of stability.

The new trading platform has also brought more discussions to the digital asset industry.

Huang Haiguang, founder of Cabin VC, commented on this: "Hong Kong is the largest offshore market for RMB in the world. into the trading market."

He analyzed and pointed out: "This also shows that DBS has a strong ambition in the digital asset trading business, and also has the intention of taking advantage of Hong Kong's status as an Asian financial center. Moreover, DBS has been deeply involved in the Chinese market for many years, and is very aware of China’s regulatory policies on digital currency and China’s strength and potential in the global digital asset trading market.”

Wu Tong, a well-known scholar in the field of blockchain and digital economy, and deputy director of the CECBC Blockchain Special Committee, said in an interview with Blocklike: "DBS Bank This action is similar to the (USA) Intercontinental Exchange’s launch of Bakkt, a cryptocurrency trading platform. In the jurisdictions of these two places, this kind of behavior is possible. The advantages of large financial institutions in digital asset exchanges are Obviously, including the number of customers, the safety factor, and the ability to communicate with regulators, there are obvious advantages.”

"Using the Hong Kong dollar as one of the currencies on the other side, we can see that: first, between Hong Kong and Singapore, no matter in terms of trade or financial The exchanges are very close, and they are all important financial centers in the Asia-Pacific region; second, Hong Kong’s laws and policies also allow such incidents. In Hong Kong’s primary market, digital assets can enter the regulatory sandbox, and in the second In the secondary market, relevant transactions can also be carried out. The licenses involved in different business types mainly include licenses 1, 4, 6, and 9.”

Token economic design expert and Silk Road Digital Capital partner Ye Kai believes: "STO is a product supported by clear financial assets. The trading platform can refer to iSTOX, the first compliant digital securities trading platform in Singapore, which is the same. Therefore, the first stock or product that can be traded should still be based on real estate.

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At the same time, he expressed to Blocklike his expectations for DBS's digital custody services in Southeast Asia: "It is worth noting that digital asset custody is very critical. From the perspective of custody, through It may not be the mainstream for the four legal currencies mentioned above to directly buy and sell digital currency spot. The next step of custody is more likely to have a Grayscale model.”

Public data shows that, as the leading banking institution in Southeast Asia, DBS Bank currently manages about 170 billion US dollars in assets, and continues to target the digital currency field Quarterly report update. Prior to this, DBS Bank had already obtained the "Recognized Market Operator" license approved in principle by the Monetary Authority of Singapore. Represents the authorization of DBS Bank to engage in organized market operations in assets such as stocks, bonds and private equity funds.

However, according to Lianhe Zaobao, DBS CEO Piyush Gupta publicly told the media that the digital asset exchange has no plans to Open to retail investment. At this stage, institutions are still the main camp for DBS to conduct digital asset transactions.

For Singapore, this is not the first domestic digital asset trading platform. The iSTOX mentioned by Ye Kai is the first local regulated Digital asset comprehensive platform.

As early as 2018, Singapore Exchange and Heliconia Capital Management, a subsidiary of Temasek Holdings, invested in iSTOX. By May 2019, iSTOX, an integrated digital securities platform, had been included in its central bank regulatory sandbox by the Monetary Authority of Singapore (MAS). Since 2020, iSTOX has continuously received investment from financial institutions in Japan, South Korea, Singapore and other places.

Singapore and DBS may be ready for the next step in the development of digital assets.