Singapore’s largest bank, DBS Bank, doubles down on crypto as it announces plans to launch structured notes and OTC crypto options trading for institutional clients.
Starting in the fourth quarter 2024, DBS Bank will offer financial products tied to the prices of Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies by market cap.
Per a press release today, institutional clients seeking exposure to Bitcoin and Ethereum can invest in the assets through DBS’ structured notes and options trading.
According to a recent GlobalBank report, DBS Bank is the largest bank by asset size in Singapore, with a value of $509.1 billion.
Options Trading and Structured Notes Defined
For context, a crypto options contract shields investors from the volatility risks associated with the underlying asset. The contracts’ values are obtained from the assets’ prices, specifically Bitcoin and Ethereum in this case. The contracts allow investors to choose when to buy and sell the assets at predetermined prices.
Meanwhile, structured notes are debt securities banks issue to their clients. Like crypto options contracts, structured notes’ returns are determined by the prices of their underlying assets.
Notably, the announcement disclosed that clients could leverage multiple options structures to protect themselves against market volatility plaguing the assets.
For instance, with the “put option,” DBS customers can sell BTC at a predetermined price and date, irrespective of whether the asset plummets below the stipulated price on the specified date.
DBS Expands Its Customers’ Exposure to Crypto
Commenting on the development, Jacky Tai, DBS’ Head of Trading and Structuring, highlighted the significance of the upcoming solution.
According to Tai, as professional investors increase their digital asset holdings, the crypto options trading and structured notes provide them with new ways to incorporate advanced portfolio management strategies. Additionally, Tai noted that the upcoming service will expand customers’ exposure to the crypto ecosystem.
It is worth noting that DBS Bank is not a new player in the crypto space. The bank has been providing its clients with access to the emerging industry.
In 2022, DBS integrated spot crypto trading into its banking app, DBS Digibank. The offering allows accredited wealth investors to trade four cryptocurrencies, Bitcoin, XRP, Ethereum, and Bitcoin Cash, directly from the bank’s native exchange, dubbed DBS Digital Exchange (DDEX).
Last month, the bank partnered with digital payment provider Ant International on a pilot project that introduced DBS Treasury Tokens on its EVM-compatible blockchain.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
