Targeting high net worth customers, DBS Singapore plans to expand its cryptocurrency business
Piyush Gupta, the CEO of DBS since 2009, said that the downturn of the crypto market proved that mature and regulated financial institutions, not just start-ups, should provide products such as digital asset trading for retail investors.
The bank's brokerage department obtained a cryptocurrency license from the monetary authority of Singapore last year, allowing its institutions and wealthy customers to visit DBS digital exchange by invitation.
Gupta said that DBS must support Singapore in promoting cutting-edge financial technology. People want us to be pioneers in this field and continue to break through boundaries. The bank has less than 1000 members in the exchange, but will soon serve 300000 wealthy clients in Asia, including private banks, accredited investors, other exchanges and funds, through its DBS mobile banking app. In addition to allowing DBS Bank to provide it to more customers, the app will also make customers' processes less cumbersome and faster. As of December 2021, DBS had total assets of S $686 billion (US $488 billion).
Gupta described the challenges faced by the country's regulators. On the one hand, we want to become a global encryption center. On the other hand, we are also very worried that our domestic population will be harmed by such speculative assets.
Meanwhile, Gupta said that the losses suffered by retail investors in the cryptocurrency crash highlighted the importance of more mature financial institutions providing digital asset services.
It reported that DBS launched the digital exchange in December 2020. Yu said in February this year that it planned to launch the retail crypto trading platform before the end of 2022. However, in early April, it postponed the plan on the grounds of technical challenges and resistance from regulators. However, DBS Bank of Singapore previously said that the number of transactions on its digital exchange in June was four times that in April, and the purchase volume accounted for 90%. Lionel Lim, CEO of DBS digital exchange, also said that with the continuous volatility of the market, today's investors are looking for a safe harbor to trade and store their digital assets.
'My view is that we can do this for retail investors, but regulators don't necessarily think so, 'Gupta said. Before DBS launched its own exchange, about $1 billion had flowed out of DBS and into the global cryptocurrency exchanges operated by companies including genesis and binance. He added that entrusting companies such as DBS would bring "better results". DBS can provide "guardrails" and protection measures.
Despite the protective measures expressed by DBS. However, analysts warn that no regulator can guard against market risks. Nizam Ismail, founder of ethikom consultancy, a Singapore consulting firm, said: "in fact, cryptocurrency is very unstable. Fundamentally speaking, it must depend on people's understanding of risks." The company provides compliance advice to enterprises, adding that many banks have failed to do so. He added that it is difficult to judge if it is assumed that DBS may be safer for retail investors who want to trade cryptocurrencies.
What we really need is some kind of check or driver's license to make sure [retail investors] understand the risks. This does not exist, "said zennon kapron, director of kapronasia, a financial technology research and advisory group. "Whether this comes from banks such as DBS is another question."
It is worth mentioning that earlier this year, the CEO of DBS said that it was obvious that retail cryptocurrency transactions would not be provided this year. He pointed out that the bank's focus is to expand its cryptocurrency products to certified institutional investors, and will consider opening a retail line when regulators and technology are ready. This year, it will not do any retail cryptocurrency products in Singapore, and the technology to create a retail trading platform will take longer than expected. DBS's current crypto products are open to qualified investors in Singapore, who are defined as investors with assets of S $2 million (US $1.5 million).