DBS Private Bank launches trust solution for cryptocurrencies

In an industry first, all Singapore residents can now use DBS NAV Planner, one of the world’s best financial planning solutions. DBS NAV Planner will harness world’s first public-private open banking initiative SGFinDex to widen reach to all.

Clients of DBS Private Bank can now integrate cryptocurrencies into their wealth succession plans

DBS Private Bank
image: DBS
  • Builds on DBS Digital Exchange’s capabilities to roll out Asia’s first bank-backed trust solution for cryptocurrencies

Amid rising interest in cryptocurrencies, DBS Private Bank has introduced a trust solution for the asset class via DBS Trustee – the bank’s wholly-owned, licensed trust company – to enable its private banking clients to invest, custodise and manage their digital assets in a safe, secure, and structured manner.

This offering is Asia’s first bank-backed trust solution for cryptocurrencies, and builds on the DBS Digital Exchange (DDEX). Launched in December 2020, the industry-leading DDEX enables institutional investors and accredited investors to tap into a fully integrated tokenisation, trading and custody ecosystem for digital assets.

DBS Private Bank’s new trust offering applies only to cryptocurrencies hosted on DDEX (namely Bitcoin, Ether, Bitcoin Cash and XRP), and clients can work closely with DBS Private Bank to integrate these assets into their wealth succession plans.

The offering builds on DDEX’s existing proposition for private banking clients, which provides security and transparency for crypto-assets with institutional-grade safekeeping and custodial services, and robust due diligence on the chain source.

Joseph Poon, Group Head of DBS Private Bank, said, “In recent years, more clients have expressed interest or are already invested in digital assets, and we expect this trend to accelerate as cryptocurrencies turn more mainstream. Our trust structure allows clients to conveniently hold these assets, with a peace of mind that they will be safely managed and passed on to their intended beneficiaries.”

“As trusted advisors to our clients, we are very much committed to staying ahead of the curve and supporting their evolving investment needs. As we navigate today’s rapidly changing world and an ever-broadening array of investment opportunities, ensuring the long-term growth and protection of our clients’ wealth remains a keystone of our proposition.”

With the trust solution, clients can also be assured that critical information about their digital assets (including access instructions, passwords, and information on the types of digital wallets, online exchanges and wallet back-ups, etc.) will be kept confidential after their passing.

This is because trusts are kept out of the probate process and do not normally become part of the public record. This also saves clients’ beneficiaries from having to deal with potential complexities that could arise during the probate process, which include jurisdictional estate taxes.

Lee Woon Shiu, Regional Head of Family Office, Wealth Planning and Insurance Solutions at DBS Private Bank, said, “Confidentiality, peace of mind and taxation often emerge as top-of-mind concerns in our conversations with clients, and we would advise them to set up trust structures rather than wills, which are subject to the probate process.”

“This is especially so considering that international regulations and protocols are still nascent in the digital asset space, which could give rise to complications or unnecessary confusion if proper measures are not in place to prevent them. By keeping their DDEX-hosted digital assets in a trust administered by professional licensed trustees such as DBS Trustee, our clients can be assured that the succession planning of their digital asset wealth is being taken care of by experienced professionals.”

DDEX has enjoyed steady growth since its launch: as of the first quarter this year, it holds SGD 80 million in assets under custody, with trading volumes up 10-fold to SGD 30 – 40 million. It currently has 120 clients and a robust pipeline awaiting onboarding. Investors can also look forward to an enhanced DDEX experience in the coming months, as efforts to conduct its first security token offering as well as expand operating hours (from Asian time zone to round-the-clock) are underway.

Mr Paul Ho, chief officer at iCompareLoan, said: “The solution offered to DBS Private Bank customers comes at a time when cryptocurrencies are taking a beating. China for example, has its banned financial institutions and payment companies from providing services related to cryptocurrency transactions, and warned investors against speculative crypto trading.”

“The Chinese Government said that the volatility of cryptocurrency has the potential to seriously infringe on the safety of people’s property and disrupting the normal economic and financial order.”

DBS announced in December last year that it will set up a digital exchange, enabling Institutional Investors and Accredited Investors to tap into a fully integrated tokenisation, trading and custody ecosystem for digital assets.

With the DBS Digital Exchange, DBS will leverage blockchain technology to provide an ecosystem for fund raising through asset tokenisation and secondary trading of digital assets including cryptocurrencies. This includes:

Security Token Offerings – A regulated platform for the issuance and trading of digital tokens backed by financial assets, such as shares in unlisted companies, bonds and private equity funds.
Digital Currency Exchange – Cryptocurrency trading that will facilitate spot exchanges from fiat currencies to cryptocurrencies and vice versa. The DBS Digital Exchange will offer exchange services between four fiat currencies (SGD, USD, HKD, JPY), and four of the most established cryptocurrencies, namely Bitcoin, Ether, Bitcoin Cash and XRP.
Digital Custody Services – An institution-grade digital custody solution to meet the increasing demand for secure custodial services tailored for digital assets under their prevailing regulatory standards. Leveraging DBS’ experience in providing world-class custody services for conventional assets, DBS’ digital custody services provide the custody of cryptographic keys that control digital assets on behalf of clients.

The announcement follows the in-principle approval by the Monetary Authority of Singapore to recognise DBS Digital Exchange as a Recognised Market Operator, allowing it to operate organised markets for assets such as shares, bonds and private equity funds.

Written by Ravi Chandran

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