DBS Bank Commences First Ever Security Token offering
DBS Bank, a Singapore-headquarter global lender, has commenced the world’s first security token offering (STO) in the form of a digital bond. The DBS digital bond was sold at $11.35 million and has a six-month maturity with a 0.60% annual yield rate.
The offering was made through a private placement facilitated by DBS Digital Exchange (DDEx), and became the foremost STO on the platform. To foster investor participation, the bond is off in 10,000 Singapore dollar board lots (approximately $7,560), a significant drop from the 250,000 Singapore dollar board lots at which standard wholesale bonds are traded.
Customers of DDEx who are qualified or institutional customers will be able to trade the digital bonds on the secondary market. DBS expects that its offering would pave the way for other issuers to use the DDEx platform to undertake security token offerings.
DBS’s Group Head of Money Markets, Eng-Kwok Seat Moey, stressed that security tokens are an economical and creative way to raise capital in the Asia-Pacific region, which represents over 30% of global private equity markets.
The bank, in its media release, stated:
“Our first STO listing on the DBS Digital Exchange is a big accomplishment, as it demonstrates the power of our digital asset network in enabling new avenues for issuers and investors to realize full potential. With increasing number of our customers adopt security token issuing as part of their capital fundraising efforts, we anticipate asset tokenization to get more widespread.”
Moey believes that daily trades on DDEx have climbed by 900% since the platform went live in December 2020, with the platform currently serving over 120 traders. DBS’s crypto custody service also manages assets worth upwards of $60 million. The bank also announced the establishment of a trust structure that would provide investment management services to Bitcoin (BTC), Ether (ETH), XRP, and Bitcoin Cash (BCH) traders.