DBS to Launch Crypto Options and Structured Notes for Institutions in Q4 2024
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On September 17, Singapore’s DBS Bank announced plans to launch over-the-counter (OTC) crypto options and structured notes for its institutional clients. The move is scheduled for the fourth quarter of 2024, marking a significant development in the bank’s digital asset offerings.
Managing Crypto Volatility with Options
According to a press release, these new offerings will allow DBS clients who hold Bitcoin (BTC) and Ethereum (ETH) with the bank to hedge their positions against market volatility.
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Clients can purchase put options, which enable them to sell Bitcoin at a predetermined price, even if the market price falls below that level. This strategy helps clients protect their investments and manage the inherent volatility of digital assets.
While no specific date has been provided, DBS has confirmed that the new crypto products will be available to institutional investors and accredited clients of DBS Private Bank and DBS Treasures Private Client.
Jacky Tai, DBS group head of trading and structuring, explained the rationale behind this move: “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.”
He added that this development is part of DBS’s broader goal to provide professional investors with institutional-grade access to the growing digital asset ecosystem.
A crypto options contract derives its value from the price of the underlying cryptocurrency. Investors can use these contracts to hedge their exposure to Bitcoin and Ethereum’s price volatility.
Expanding Web3 Capabilities
DBS has steadily increased its presence in the Web3 space. In August 2024, the bank launched a pilot project introducing DBS Treasury Tokens on a blockchain compatible with Ethereum’s virtual machine (EVM).
This pilot uses blockchain technology to improve corporate liquidity management across various markets.
DBS has also begun a blockchain-based initiative to streamline the distribution of government grants. The bank demonstrated that blockchain could improve the efficiency of grant disbursements and enhance transparency.
These initiatives reflect DBS’s commitment to integrating blockchain technology into its operations and further solidifying its role in the evolving Web3 landscape.
Notably, the crypto landscape in Singapore is flourishing, with DBS at the forefront.
A study conducted by investment migration consultancy firm Henley & Partners recognized Singapore as the leading country for crypto adoption.
The report highlights the country’s supportive banking system, favorable regulations, and significant technological advancements as the reasons for its top spot ahead of Hong Kong, the United Arab Emirates, and the United States.
This report follows calls from industry experts like Robert Kiyosaki for increased investment in crypto assets like Bitcoin, as he claimed the asset is the ultimate protection against hyperinflation.
