Singapore’s DBS Bank Issues Bond Through Security Token Offering

| Peter Wind

Key highlights:

  • Singapore’s biggest bank DBS Bank has issued a digital bond through a securities token offering
  • The $11.3 million bond has a maturity of 6 months and a 0.6% per annum coupon rate
  • DBS Bank launched their digital asset platform DBS Digital Exchange last year

DBS Bank issues bond as a security token

Singapore-based DBS Bank has issued a digital bond through blockchain-based security tokens. DBS Bank serves as the sole bookrunner for the S$15 million bond, which translates to about $11.3 million. The digital bond has a maturity of six months, and a 0.6% per annum coupon rate. 

The bond is tradeable on the DBS Digital Exchange, an exchange for digital assets that the bank launched last year. The exchange is not open to the public – it operates on a membership basis and only services institutional and accredited investors. 

The bond will be traded in lots of S$10,000, which are much smaller than the S$250,000 standard lot size when it comes to wholesale bonds. According to DBS global head of fixed income Clifford Lee, the smaller lot sizes are viable because of the bond’s issuance on the digital exchange.

Eng-Kwok Seat Moey, the head of capital markets at DBS, commented on the bank’s first blockchain-based bond, saying that the bank expects security tokens to gain traction:

“Our maiden STO listing on the DBS Digital Exchange is a significant milestone, as it highlights the strength of our digital asset ecosystem in facilitating new ways of unlocking value for issuers and investors. We expect asset tokenisation to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fund raising exercise.”

In addition to a security token platform, the DBS Digital Exchange also features a cryptocurrency exchange and crypto asset custody services. Currently, the exchange lists Bitcoin, Ethereum, XRP and Bitcoin Cash. 

Mainstream financial players are becoming increasingly engaged with blockchain technology, thanks to its potential efficiency and transparency benefits – in April, the European Investment Bank issued a €100 million bond on the public Ethereum blockchain in partnership with Goldman Sachs, Santander and Societe Generale. 

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