Singapore Private Bank Unveils First Tokenized Bond

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In Brief
  • DBS's digital bond will be the first digital security offering to be made available on its digital exchange.

  • The bond will trade in board lots of S$10,000; significantly less than the S$250,000 expected of wholesale bonds.

  • DBS head of capital markets says she expects asset tokenization to become more mainstream.

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The Singapore private bank DBS has announced its first tokenized bond. The first digital security offering made available on its digital exchange.

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DBS made its announcement on May 31. The S$15 million ($11.3 million) digital bond will reportedly come with a six-month tenor, as well as a coupon rate of 0.6% per year. Furthermore, the bank states the bond will trade in S$10,000 ($7,566) board lots. A fraction of the S$250,000 ($189,156) investing and trading increments expected of traditional wholesale bonds.

DBS will reportedly be the only bookrunner for transactions relating to the bond, taking place on the bank’s digital exchange.

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Singapore has solutions

Recent reports stated that the cryptocurrency crime rate in Singapore has been on the rise since 2018. More specifically, police in the country recorded that over $29 million had been lost. Including nearly 400 recorded fraud cases during the COVID-19 pandemic last year. A figure that tripled that of 2019.

This is in spite of the regulatory framework that Singapore introduced back in 2019 and which took effect a year later. Namely, the Payment Services Act, under which cryptocurrency platforms had to hold licenses. In addition, exchanges and cryptocurrency service operators would be placed within the purview of the Monetary Authority of Singapore (MAS), Singapore’s central bank. 

Experts believe Singapore’s regulatory framework for cryptocurrency, one of the first in the world to be introduced, could be used as a blueprint by other nations such as the United States and countries in Europe.

DBS to co-create Partior

Meanwhile, it has hardly been quiet behind-the-scenes at DBS this year. Not least with their collaboration with investment bank JP Morgan and fellow Singaporean institution Temasek. On April 28, reports stated that the trio were working together to form Partior, a new blockchain platform.

According to a JP Morgan press release, Partior would aim “to disrupt the traditional cross-border payments ‘hub and spoke’ model, that has resulted in common pain points, including multiple validations on payment details by banks.”

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Dale Hurst is a journalist, presenter, and novelist. Before joining the Be In Crypto team, he was an editor and senior journalist at a news, lifestyle and human-interest magazine in the UK. Cryptocurrency was one of the first subjects he specialized in when first going freelance in 2018, reviewing exchanges and analysing lawsuits.

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