DBS, Southeast Asia’s largest bank, has launched its first security token offering (STO) on its cryptocurrency exchange. The DBS Digital Bond is priced at 15 million Singapore dollars. “We expect asset tokenization to increasingly become more mainstream,” said a DBS executive.
DBS’ First Security Token Offering
DBS announced Monday its first security token offering (STO) on the DBS Digital Exchange (Ddex). The DBS Digital Bond, priced at 15 million Singapore dollars (US$11.37 million), comes with a six-month tenor and coupon rate of 0.60% per annum. It is offered as a private placement and DBS is the sole bookrunner for the transaction. The bank detailed:
This paves the way for other issuers and clients to tap on Ddex’s capabilities to efficiently access capital markets for their funding needs and sets the stage for more STO issuances and listings on Ddex as asset tokenisation turns mainstream.
Clifford Lee, Global Head of Fixed Income at DBS, said that “this marks the first of many steps in the journey to evolve the traditional bond issuance into a broader digital ecosystem where more inclusive issuer and investor participation can be rapidly developed.”
Lee continued: “While most bond tokenization exercises announced in Asia to date tend to be repackaged forms of a conventional bond issue, the current transaction directly combines existing legal and tax infrastructure requirements with a direct issuance on the digital exchange in smaller lot sizes.” The executive added:
This bond token structure was only made possible because of the progressive development of Singapore’s legal and tax infrastructure, which can facilitate more STO issuances to broaden and deepen our capital markets.
Eng-Kwok Seat Moey, Group Head of Capital Markets at DBS, commented: “Our maiden STO listing on the DBS Digital Exchange is a significant milestone … This cements our ability to provide integrated solutions across the digital asset value chain, from deal origination to tokenization, listing, trading, and custody, which in turn opens the door for more STOs on Ddex.” He emphasized:
We expect asset tokenisation to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fund raising exercise which we believe will boost Singapore’s ambitions to be a digital asset hub in Asia.
The DBS Digital Exchange was launched in December last year. It offers “exchange services between four fiat currencies (SGD, USD, HKD, JPY)” and four “cryptocurrencies, namely bitcoin, ether, bitcoin cash, and XRP,” its website explains.
The bank disclosed in its first-quarter earnings call that its crypto exchange “enjoyed strong market traction since its launch.” Specifically, its “Daily trading volumes have increased 10-fold from the initial week of launch, and the exchange currently serves over 120 participants. DBS also holds over SGD 80 million in digital assets in its custodial service,” the bank revealed. In May, the bank launched a trust service for cryptocurrencies.