Singapore’s largest bank is planning to grow its crypto and digital asset business despite a bearish cryptocurrency market, saying it wants to expand its digital exchange and provide services to more than 300,000 of its affluent clients in Asia.
Piyush Gupta, CEO of DBS since 2009, said the crypto market downturn has proven that established and regulated financial institutions, rather than just start-ups, should offer products like digital asset trading to retail investors.
The bank’s brokerage arm last year received a cryptocurrency license from the Monetary Authority of Singapore, allowing its institutional and wealthy clients to access DBS Digital Exchange by invitation.
Gupta said that the bank has less than 1,000 members on the exchange, but will soon offer the service to 300,000 of its affluent clients across Asia including private banks, accredited investors, exchanges and other funds through the DBS mobile banking app.
He said the app will make the process less difficult and faster for customers as well as allow DBS to offer it to more customers. DBS had total assets of 686 billion Singapore dollars (488 billion US dollars) as of December 2021.
The former chief executive of Citibank, who has held senior banking positions across Asia, said DBS had to support Singapore’s push toward cutting-edge financial technology. “People are looking to us to be leaders in this field and to continue pushing boundaries,” he said in an interview with the Financial Times.
The plans come from DBS, in which state investment group Temasek holds a stake of just under 30 percent, as Singapore grapples with messaging about its attempt to be a cryptocurrency hub. The city-state, whose economy is based on financial services and trade, believes it must innovate to remain relevant.
But the collapse of several high-profile crypto groups this year, including Singapore-based Three Arrows and Terraform Labs, as well as declining valuations globally, have raised questions about MAS’ strategy.
In response, MAS managing director Ravi Menon said last week that the regulator would take steps to protect retail investors while emphasizing the city’s digital asset strategy.
Gupta described the challenges facing regulators in the country. On the other hand, we want to be a global hub for cryptocurrency. On the other hand, we are also very concerned about our local residents being burned in this speculative asset class.”
Gupta said the losses incurred by retail investors in the crypto crash underscore the importance of having more established financial institutions that provide digital asset services. The total number of transactions on the DBS Digital Exchange doubled from April to the end of June, while the amount of bitcoin purchased on the exchange nearly quadrupled. Similarly, the amount of ether, another popular token, increased by 65 percent over the same period.
“We were wise about who we brought in. My view is that we can do it for retail investors but regulators don’t necessarily see it that way.
Gupta said about $1 billion flowed from DBS to global crypto exchanges run by companies including Genesis and Binance before the bank launched its own exchange. He added that assigning companies like DBS, which can put up “barriers” and protections, would lead to “better results”.
“You could also try to create frameworks and processes to make it reasonably accessible to everyone instead of having an organized space and a cowboy space and letting everyone go into the cowboy space.”
Analysts have warned that no regulator can protect against market risks. “In truth, cryptocurrencies are very volatile and you should basically rely on people who understand the risks,” said Nizam Ismail, founder of Singapore-based Ethikom Consultancy, which advises companies on compliance. .
Hypothetically, DBS could be safer for retail investors wanting to trade cryptocurrency but it was hard to judge, he added.
“What we really need is some kind of test or a driver’s license to guarantee it [retail investors] Understand the risks. Zenon Kaprun, Director of Kapronasia said, “This does not existAnd the A research and advisory group in the field of financial technology. “Whether this is coming from banks like DBS is another question.”