DBS Bank, a Singapore-based multinational banking corporation, has unveiled its first-ever security token offering (STO) by issuing a digital bond. Various institutions and accredited investors that signed up to the DBS Digital Exchange can access secondary markets for DBS’s digital bond.
Reports show that the DBS digital bond has been priced at $11.35 million. Notably, it comes with a 6-month coupon and tenor rate of 0.60% yearly. This offering was carried out via a private placement that is hosted by DBS Digital Exchange (DDEx), marking the platform’s first STO.
This bond is designed to be traded in board lots of 10,000 Singapore dollars, which is about $7,560, to encourage investor engagement. This amount represents a massive reduction when compared to the 250,000 Singapore dollar board lots that the traditional wholesale bonds are mainly traded-in.
These digital bonds will be made available for secondary trading for the clients of DDEx who are institutional or accredited investors. DBS bank now hopes that its offering will create a way for many other issuers to launch security token offerings through the DDEx platform.
The Group Head of capital markets at DBS, Eng-Kwok Seat Moey, insisted that these security tokens offer an efficient and innovative strategy for getting capital in the Asia-Pacific region. This region currently represents over 30% of the global private equity markets. He said:
“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 tokenization to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fundraising.”
Since the launch last December, Moey estimates that the daily volumes on DDEx have surged by 900%. The platform is now serving over 120 traders. DBS bank’s crypto custody service also owns over $60 million in assets.
The bank also unveiled a trust structure that offered investment management services for Ether (ETH), Bitcoin (BTC), Bitcoin Cash (BCH), and XRP speculators in early May.