Crypto Trading Volume Revs Up at Singapore's DBS Bank

One year in, the digital asset exchange launched by Singapore’s DBS Bank saw the first indication of exponential growth in the fourth quarter of 2021 when trading volume hit more than double the rest of the year combined.

That said, DBS Digital Exchange’s full-year trading volume for 2021 was about $819 million (S$1.1 billion), a mere fraction of day-to-day volumes of platforms like Binance or institution-focused LMAX Digital.

DBS’ 600-member exchange (which includes a central bank) is now seeing things ramp up after switching on 24/7 trading in August 2021, according to Lionel Lim, CEO of DBS Digital Exchange (DDEx). In the fourth quarter of 2021, trading volume was about $595.5 million (S$800 million), more than double the preceding three quarters.

Rather like Switzerland, Singapore has been nimble and innovative when it comes to integrating crypto into the financial fabric of the country. But the regulatory clarity that accompanies all this involves a high bar in terms of compliance, hence the decidedly measured approach.

The first (and only) bank to launch a digital asset exchange back in December 2020, Lim emphasized this first year has been about testing the infrastructure needed to start moving an entire digital asset ecosystem, rather than clocking up trading volume.

A main component of this vision is the concept of tokenized financial assets, such as shares in private companies or fractional ownership of real estate, complemented by crypto-to-fiat on-ramps and digital asset custody within DBS Bank itself.

“What we have really done here is try to digitalize the process of capital markets, right from origination, to settlement, custody and trading,” Lim said in an interview. “We want to scale this in an exponential way, but we have remained cognizant of the regulatory landscape around crypto.”

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DDEx currently offers exchange services between four fiat currencies (Singapore dollars, U.S. dollars, Hong Kong dollars and Japanese yen) and four cryptocurrencies (BTC, ETH, BCH and XRP), with more coins and tokens to be added in 2022.

There will also be a measured expansion of tokenized issuances, following DDEx’s mid-2021 listing of its first security token offering in the form of a S$15 million digital bond. Now that a “well-oiled mechanism” is in place, there will be more security token offerings in the coming quarter and exploration of a broader client base, Lim said.

“We are toying with the idea of how we can serve a broader segment of customers down the road, to kind of move down to so-called middle-affluent people, potentially,” Lim said. “But of course we will approach this in a very measured manner.”

DBS Group Holdings Ltd. is scheduled to report full-year results on Monday.