DBS Bank of Singapore plans to launch over-the-counter (OTC) crypto options trading and structured notes for institutional clients in Q4 2024, according to a Sept. 17 statement.

This move positions DBS as the first Asian-headquartered bank to offer financial products tied to the value of Bitcoin and Ethereum, the two largest digital assets by market capitalization.

According to the bank, the crypto options and structured notes products will only be available to eligible institutional investors and accredited clients of DBS Private Bank and DBS Treasures Private Client.

New crypto offerings

The bank revealed that its new products build on its existing crypto services through DBS Digital Exchange (DDEx).

The new products give clients more ways to engage with digital assets as investors can now potentially earn a yield on fiat currency or take delivery of underlying crypto.

Also, Bitcoin and Ethereum holders at DBS gain additional benefits. They can now hedge against market swings and possibly generate returns through various options strategies.

Jacky Tai, head of trading and structuring at DBS Group, highlighted the rising demand for digital assets among professional investors. He explained how these new products broaden the bank’s digital asset services.

He said:

“These financial products are an expansion of the bank’s value proposition to provide clients trusted institutional-grade access to the digital asset ecosystem. Now, our clients have an alternative channel to build exposure to the asset class and incorporate advanced investment strategies to better manage their digital asset portfolios.”

For example, a client worried about Bitcoin’s price swings could buy a put option. This allows them to sell Bitcoin at a set price in the future, even if the market price falls below that level.

Crypto trading boom

DBS also reported significant growth in crypto trading volumes on its digital exchange.

In the first five months of 2024, trading volume for digital payment tokens on DDEx tripled compared to the same period in 2023. The number of active trading clients grew by 36%, while digital assets under custody increased by 80%.

The bank credited this growth to a net inflow of deposits from clients seeking safe, bank-grade platforms for custody and trading of digital assets.