DBS Private Bank starts Asia's first bank-backed crypto trust service

DBS Private Bank has started Asia's first bank-backed trust solution for cryptocurrencies as demand for digital assets increases.

This will allow clients to invest in, custodise and manage these assets in a safe, secure and structured manner, DBS Group Holdings said in a statement yesterday.

It builds on the DBS Digital Exchange - launched last December - and offers institutional investors and accredited investors a fully integrated tokenisation, trading and custody ecosystem for digital assets.

The service applies only to cryptocurrencies hosted on the digital exchange: bitcoin, ether, bitcoin cash and XRP.

Traditional financial companies are ramping up crypto offerings as digital assets mature and soar in price, creating client demand.

UBS Group is reportedly in the early stages of planning to roll out crypto investments to wealthy clients. Goldman Sachs Group and Morgan Stanley are boosting their offerings.

DBS has already joined JPMorgan Chase & Co and Singapore investment firm Temasek in creating a blockchain payment platform.

"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," said Mr Joseph Poon, group head of DBS Private Bank.

"Our trust structure allows clients to conveniently hold these assets, with peace of mind that they will be safely managed and passed on to their intended beneficiaries."

With the trust solution, critical information about clients' digital assets, such as access instructions and passwords, will be kept confidential after their death, DBS said.

This is because trusts are kept out of the probate process and do not normally become part of the public record.

This will save clients' beneficiaries from having to deal with potential complexities that could arise during the probate process, which include jurisdictional estate taxes, DBS added.

As at the first quarter, its digital exchange held $80 million in assets under custody, with trading volumes up tenfold to $30 million to $40 million, the firm said. The exchange has 120 clients and "a robust pipeline awaiting onboarding".

DBS said the digital exchange is working on efforts to conduct its first security token offering, and expand operating hours from Asian time zones to round-the-clock.

BLOOMBERG