Singapore’s DBS Bank Launches Tokenized Notes on Ethereum

DBS Bank, Singapore's largest financial institution, is making waves in the blockchain space by launching tokenized structured notes on Ethereum. As per reports, these financial products will be made available to accredited and institutional investors via local exchanges like ADDX, DigiFT, and HydraX.

DBS Bank Pioneers Tokenization on Ethereum

In an official announcement earlier today, Singapore’s DBS Bank revealed its collaboration with crypto exchanges, including ADDX, DigiFT, and HydraX, for a tokenization push. Through this latest initiative, DBS Bank will make tokenized structured notes available to eligible investors on the Ethereum public blockchain. DBS Bank stated,

By leveraging the track record in tokenisation and partnerships with third-party digital platforms, the institution is providing more accredited and institutional investors with greater flexibility in using sophisticated financial instruments to manage their portfolios.

Notably, the debut product is a crypto-linked note that cashes out when digital assets rise in price, capping downside exposure. Structured notes usually require at least $100,000 investments, are customized, and thus aren't fungible.

Typically, Tokenisation breaks down the original note into individual tokens, each representing a USD $1,000 share. These 'bite-sized' tokens are identical, boosting fungibility and making them easier to trade. With these traits, investors can subscribe to and trade tokenized structured notes more flexibly and precisely. This helps them manage portfolios with more agility and resilience in volatile markets.

Li Zhen, Foreign Exchange and Digital Assets Head, revealed that the project addresses the “growing appetite for digital assets.” He added,

Asset tokenisation is the next frontier of financial markets infrastructure. Since 2021, DBS has been active in scaling this ecosystem by fostering responsible innovation, enabling tokenisation to meet real market demand and make financial markets more efficient and accessible. By leveraging DBS's strong credit ratings, partnerships and capabilities, more investors can now tap our solutions to better manage their portfolios.

Singapore’s Crypto Initiatives

This move aligns with Singapore’s growing interest in cryptocurrencies to foster innovation and economic stability. The country has been embracing blockchain technology and supporting crypto initiatives.

For instance, Volkswagen Company Singapore has partnered with FOMO Pay to accept cryptocurrency payments for cars and services. This is being touted as one of the largest mainstream adoptions of cryptocurrencies by an automobile company in the region.

In addition, the country has been envisioning establishing a tokenized finance hub. Through Project Guardian, the Monetary Authority of Singapore (MAS) is pushing industry pilots that look into tokenizing assets in fixed income, FX, and funds. They're also building out cross-border infrastructure like Global Layer One to tap into worldwide liquidity.