The brokerage arm of Singapore’s DBS Bank has received formal consent from the Monetary Authority of Singapore (MAS) to provide digital payment token services as a “major payment institution”.

The regulatory approval enables DBS Vickers (DBSV), as a member of DBS Digital Exchange (DDEx), to directly support asset managers and companies to trade in digital payment tokens through DDEx.

Commenting on the approval, Eng-Kwok Seat Moey, head of capital markets at DBS and chair of the DBS Digital Exchange, says: “Having received formal regulatory approval from MAS, DBSV is now in a better position to support institutional and corporate investors in tapping into the growing potential of digital assets as an investment class. This marks another significant milestone in our ability to provide integrated solutions across the digital asset value chain, from deal origination to tokenization, listing, trading and custody.”

The DDEx is a members-only exchange for institutional investors and accredited investors. Since its launch in December 2020, the exchange has reported healthy demand from clients. It expects the number of participants on DDEx to double to 1,000 and grow its base by 20-30% annually for the next three years as investments in digital tokens grows.

In June, DDEx listed its inaugural security token offering in the form of a S$15 million (US$11 million) digital bond and in August, it became operational round-the-clock, enabling its participants to trade on the bourse at any time.

Well-regulated environment

The MAS has also awarded a major payment institution licence to Australian crypto exchange Independent Reserve, to provide digital payment token services in the city state.

The Sydney-headquartered firm can now operate as a regulated provider of digital payment token (DPT) services. It is one of the first virtual asset service providers (VASPs) to obtain a full licence under the Payment Services Act (PSA) of Singapore.

Independent Reserve beat off 170 global competitors to become a fully licensed cryptocurrency exchange for retail and institutional investors in Singapore.

The regulator subjected licence applicants to a thorough review of policies and procedures regarding customer protection mechanisms, transaction screening, and compliance structures, as well as the robustness of their information technology services.

Independent Reserve chief executive officer Adrian Przelozny says Singapore’s well-regulated environment would thoroughly address investor concerns about the safe custody of assets, KYC (know your customer) requirements, and market manipulation, making it easier for service providers to meet the needs of financial institutions that wish to trade digital assets.