DBS, Singapore’s largest bank, has announced its latest initiative to tokenize structured notes on the Ethereum 
$2,487 blockchain, catering to qualified investors through crypto investment platforms and exchanges. This development involves partnerships with ADDX, DigiFT, and HydraX to facilitate the distribution of these tokenized notes. Li Zhen, Head of DBS’ External Trade and Digital Markets, emphasizes asset tokenization as the next frontier in financial market infrastructure, with the first product featuring a structured note linked to cryptocurrency.
Distribution Partners and Product Design
DBS has collaborated with ADDX, DigiFT, and HydraX to act as distribution channels for their tokenized structured notes targeted at qualified investors. The products are set to be listed on crypto investment platforms and exchanges, ensuring organized and transparent distribution to meet institutional demand efficiently.
Structured notes are securities whose value is linked to an underlying asset or index and tailored to investor risk preferences. According to DBS, these products typically require a minimum investment of $100,000. Tokenization transforms these securities into digital tokens within the blockchain, without altering their fundamental structure.
The initial issuance of cryptocurrency-linked structured notes is designed to provide cash returns when prices rise, with features to limit potential losses if prices fall. This strategy aims to reward growth scenarios while balancing risks in declining markets.
Target Audience, Fractional Structure, and Strategy
Each tokenized note will represent an interchangeable $1,000 fraction of the original note, offering flexibility for portfolio management among qualified and institutional investors. As Singapore’s appeal as an asset management hub grows, the presence of over 2,000 single-family offices in the country is highlighted.
DBS plans to expand beyond cryptocurrency-linked notes, incorporating equity-linked and credit-linked structured notes into their tokenized offerings. This will significantly diversify their product suite, catering to varying risk profiles. In the first half of the year alone, DBS clients conducted over $1 billion in cryptocurrency-linked structured notes.
The target audience for these offerings includes qualified investors and institutional participants. By diversifying access channels through platforms, DBS aims for faster and more efficient investor reach. The bank’s management emphasizes tokenization’s potential to become a new standard in market infrastructure.
