DBS Bank Boosts Institutional Bitcoin Exposure with New Crypto Options and Structured Notes
Professional Rewrite:
DBS Bank, Singapore’s largest financial institution, is deepening its investments in the cryptocurrency space. The bank has announced plans to introduce structured notes and over-the-counter (OTC) crypto options trading for institutional clients, further expanding its portfolio of digital asset offerings.
Starting from Q4 2024, DBS will offer financial products linked to the prices of Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies by market capitalization. Institutional clients seeking exposure to these assets will be able to invest through DBS’s structured notes and options trading services.
According to a recent report from GlobalBank, DBS is recognized as the largest bank in Singapore, known for its forward-thinking approach in the financial sector.
Understanding Crypto Options and Structured Notes
Crypto options contracts offer investors protection against the volatility of the underlying asset. The value of these contracts is derived from asset prices, particularly Bitcoin and Ethereum in this case. The contracts allow investors to choose when to buy or sell assets at pre-determined prices.
Similarly, structured notes are debt instruments issued by banks to their clients. As with crypto options, the returns on these notes depend on the prices of the underlying assets. The recent announcement highlights that clients can leverage various options structures to shield themselves from market fluctuations affecting these assets.
For instance, with a “put option,” DBS clients can sell BTC at a pre-agreed price and date, even if the asset drops below the specified price at that time.
Expanding Crypto Exposure for Institutional Clients
Commenting on this development, Jackie Tai, Head of Trading and Structuring at DBS, emphasized the significance of the upcoming service. He noted that as professional investors increase their holdings of digital assets, the introduction of crypto options trading and structured notes will offer new avenues for integrating advanced portfolio management strategies. Tai also pointed out that this service would broaden clients’ exposure to the growing cryptocurrency ecosystem.
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It’s worth noting that DBS is no newcomer to the crypto world. The bank has already been providing its clients access to this emerging industry. DBS offers instant crypto trading through its banking app, DBS Digibank, enabling accredited investors to trade cryptocurrencies like Bitcoin, XRP, Ethereum, and Bitcoin Cash directly from its in-house exchange, DBS Digital Exchange (DDEX).
Last month, DBS partnered with digital payment provider Ant International in a pilot project that introduced DBS Treasury tokens on an EVM-compatible blockchain.
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