By being the first Asian bank providing over-the-counter (OTC) crypto options and structured notes, Singapore’s DBS Bank is creating waves in the financial industry. Originally scheduled for Q4 2024, these products will mostly target institutional investors and accredited wealth clients, giving them more investment options connected to significant cryptocurrencies like Bitcoin and Ethereum.

The action coincides with notable expansion in the cryptocurrency market; DBS notes an almost 50% rise in total market value during the first five months of 2024. While active trading clients increased by 36% and assets under custody climbed by 80%, the value of digital assets traded on DBS Digital Exchange (DDEx) almost triples compared to the same period in 2023.

With DBS’s new products, its present digital asset services—which clients now trade security tokens and cryptocurrencies—will be expanded under DDEx. OTC options trading and structured notes will give customers other ways to expose to the asset class and apply sophisticated investment strategies to better manage their digital asset portfolios.

Jacky Tai, Group Head of Trading and Structuring for Global Financial Markets at DBS, emphasized that these financial products are designed to meet the growing demand from professional investors who are increasingly allocating digital assets into their portfolios.

The structured products will let customers either get the underlying cryptocurrency depending on particular market conditions or earn dividends on cash.

DBS Bank keeps innovating in the realm of digital assets, although the crypto market is under more global regulatory scrutiny in recent weeks. With data showing that these activities reached a record high in 2023, the US Securities and Exchange Commission (SEC) has bolstered its enforcement activities against crypto companies notably in recent years.

Critics contend that the SEC has chosen to “regulate by enforcement,” rather than offering unambiguous rules. As businesses negotiate a tightly-watched regulatory environment, this has caused uncertainty and dissatisfaction among the crypto community.

DBS Bank’s leadership role among Asian banks is becoming clearer as it keeps broadening its crypto products. The launch of OTC crypto options aims to provide a structure that encourages ethical investing in digital assets as much as it does increase product offers.

As this project proves successful, more Asian financial institutions could follow similar policies, therefore influencing the future scene of bitcoin trading and investment in the area. But the results of the forthcoming congressional hearing on the SEC’s legislative approach to digital assets might have a big influence on crypto rules going forward in the United States and overseas.

Featured image from CNBC, chart from TradingView

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