DBS tokenises structured notes, to distribute via ADDX, DigiFT, HydraX

To start, it will tokenise cash-settled crypto-link participation notes.

DBS is tokenising structured notes on the Ethereum public blockchain, and will distribute these to digital exchanges and third-party digital investment platforms.

The Singaporean bank has entered into arrangements with ADDX, DigiFT, and HydraX digital platforms to distribute tokenised structured notes, according to a press release.

To start, DBS will tokenise cash-settled cryptocurrency-linked participation notes for distribution across third-party digital platforms.

It will provide investors with a cash payout when cryptocurrency prices rise, enabling them to build exposure to the asset class without having to manage any cryptocurrency.

The note is also structured to mitigate potential losses should cryptocurrency prices decline, DBS said.

Structured notes are complex instruments which typically require a minimum investment of US$100,000. These instruments are often tailored to the unique requirements of each investor, making them non-fungible.

In tokenising the notes, DBS will create individual tokens each representing a US$1,000 share of the original note. By tokenising the structured notes, investors are able subscribe to and trade them with greater flexibility and precision, the bank said.

Beyond cryptocurrency-linked notes, DBS said that it will also tokenise common structured notes such as equity-linked notes and credit-linked notes.

DBS said that it is “providing more accredited and institutional investors with greater flexibility in using sophisticated financial instruments to manage their portfolios.”