DBS Private Bank has introduced a trust solution for cryptocurrencies, enabling clients to integrate the digital assets into their wealth succession plans. Through DBS Trustee – the bank’s wholly-owned, licensed trust company – they can invest, custodize and manage their digital assets in a secure and structured manner.
The offering is Asia’s first bank-backed trust solution for cryptocurrencies, and builds on the DBS Digital Exchange (DDEX). Launched in December 2020, DDEX enables institutional investors and accredited investors to tap into a fully integrated tokenization, trading and custody ecosystem for digital assets.
The new service applies only to cryptocurrencies hosted on DDEX, namely Bitcoin, Ether, Bitcoin Cash and XRP.
“In recent years, more clients have expressed interest or are already invested in digital assets, and we expect this trend to accelerate as cryptocurrencies turn more mainstream,” says Joseph Poon, group head of DBS Private Bank.
“Our trust structure allows clients to conveniently hold these assets, with a peace of mind that they will be safely managed and passed on to their intended beneficiaries. As trusted advisers to our clients, we are very much committed to staying ahead of the curve and supporting their evolving investment needs. As we navigate today’s rapidly changing world and an ever-broadening array of investment opportunities, ensuring the long-term growth and protection of our clients’ wealth remains a keystone of our proposition.”
With the trust solution, clients are assured that critical information about their digital assets (including access instructions, passwords, and information on the types of digital wallets, online exchanges and wallet back-ups, etc.) will be kept confidential after their passing, according to DBS.
This is because trusts are kept out of the probate process and do not normally become part of the public record. This also saves clients’ beneficiaries from having to deal with potential complexities that could arise during the probate process, which include jurisdictional estate taxes, the bank says.
Lee Woon Shiu, regional head of family office, wealth planning and insurance solutions at DBS Private Bank, says: “Confidentiality, peace of mind and taxation often emerge as top-of-mind concerns in our conversations with clients, and we would advise them to set up trust structures rather than wills, which are subject to the probate process. This is especially so considering that international regulations and protocols are still nascent in the digital asset space, which could give rise to complications or unnecessary confusion if proper measures are not in place to prevent them.
“By keeping their DDEX-hosted digital assets in a trust administered by professional licensed trustees such as DBS Trustee, our clients can be assured that the succession planning of their digital asset wealth is being taken care of by experienced professionals.”
DDEX has seen steady growth since its launch. As of the first quarter this year, it holds S$80 million in assets under custody, with trading volumes up tenfold to S$30-40 million. It currently has 120 clients and a robust pipeline awaiting onboarding. The digital exchange will be launching its first security token offering in the coming months while plans are underway to expand operating hours from Asian time zone to round-the-clock.