DBS, Southeast Asia’s top bank, recently announced the launch of Asia’s first bank-backed trust offering for dominant cryptocurrencies like Bitcoin (BTC), Ether (ETH), Ripple (XRP), and Bitcoin Cash (BCH).
Today, DBS made another progressive move by issuing an SGD 15 million (US$11.3 million) digital bond in its primary security token offering (STO). The DBS Digital Bond comes with a six-month tenor and coupon rate of 0.60% per annum, which was done through private placement.
The DBS Digital Bond rigidly adheres to the current bond legal framework, thereby allowing investors the equivalent legal assurances to safeguard their rights as conventional bonds. Clifford Lee, Global Head of Fixed Income at DBS, said
While most bond tokenization exercises announced in Asia to date tend to be repackaged forms of a conventional bond issue, the current transaction directly combines existing legal and tax infrastructure requirements with a direct issuance on the digital exchange in smaller lot sizes. This token bond structure was only made possible because of the progressive development of Singapore’s legal and tax infrastructure, which can facilitate more STO issuances to broaden and deepen our capital markets.
This paves the way for other issuers and clients to tap on DDEx’s ability to locate capital markets for their funding needs efficiently and establish the stage for more STO issuances and listings on DDEx as asset tokenization turns standard. Eng-Kwok Moey, Group Head of Capital Markets at DBS, stated that
Resource digitalization through the issuance of Security Tokens presents an enormous chance for corporates looking for alternative platforms, such as DDEx raise funds Asia-Pacific’s burgeoning private capital markets. At present, the Asia-Pacific region records for almost 33.33% of the worldwide private equity market, which arrived at a record USD 4.73 trillion in 2020.
To promote broader cooperation from investors, the digital bond will be traded on board lots of SGD 10,000. This is significantly less value than traditional wholesale bonds, which typically demand investment and trading amounts in multiples of SGD 250,000.
This also highlights DDEx’s capability to offer tokenized assets for trading at much smaller denominations than traditional venues and standard securities, operating liquidity, and reducing barriers to reach for investors. With the listing of the Digital Bonds on DDEx, the stakes are now open for secondary trading among institutional and accredited investors who are either members or applicable end clients of members of DDEx.
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