DBS Cites Large Increase in Crypto Trading

Singapore’s DBS has reported a significant increase in cryptocurrencies traded on its Digital Exchange (DDEx) in 2022, and a doubling in the number of BTC custodised with the bank’s digital asset custody solution.

DBS says the number of Bitcoin (BTC) traded on DDEx was close to 80% higher year-on-year, while the number of Ether (ETH) traded was nearly 65% higher. Significantly, however, the bank does not provide hard numbers on the actual trading volumes in either currency, in spite of what it calls “these robust business metrics”.

While the actual volume traded is not disclosed, given the wider troubles in the crypto industry in 2022 and the fact that trading volumes did deteriorate on many trading venues, the DBS release does appear to indicate, as the bank says, that “investors who believe in the long-term prospects of digital assets are gravitating towards trusted and regulated platforms to access the market”.

The bank says customers continued to park more digital assets with the bank’s digital custody solution. The number of BTC custodised with DBS as of 31 December 2022 more than doubled from 2021, while the number of ETH custodised grew over 60% in FY2022. Again, no hard numbers were provided. The bank adds that DDEx doubled its customer base in 2022 with close to 1,200 participants registered on the exchange as of 31 December 2022.

DBS says adopts the industry best practice of holding all custodised digital assets separately within the bank itself using institutional-grade cold wallets, stressing that DDEx does not hold any custodised assets. The bank says it also conducts coin purity checks on all digital assets entering its custody, and fully complies with all prevailing Anti-Money Laundering/Know Your Customer standards.

“Since inception in 2020, we have taken a prudent and measured approach towards developing our digital asset ecosystem, choosing to keep pace with the market as it matures and as investors become more sophisticated,” says Lionel Lim, CEO of the DBS Digital Exchange. “We believe that the market has decisively shifted its focus towards trust and stability especially in the wake of multiple scandals that have rocked the industry. As a regulated digital exchange backed by the DBS Group, we offer many unique advantages that investors have come to appreciate as they seek reliable gateways to access the digital asset economy.”

Reinforcing this message, the bank says DDEx, as a members-only exchange serving corporate and institutional investors, accredited investors and family offices, “did not observe any major selloffs in 2022, with DDEx observing a nett buy position for its customers throughout the second half of the year”. This is because, it adds, these customers are “generally better able to manage the market risks”.