Bank of Singapore DBS Issues $11.3M Over Blockchain Bonds

Singapore-based DBS, Southeast Asia's largest bank, has become the latest bank to issue bonds on the blockchain. Issuers hope that trading traditional securities within a crypto framework will facilitate them. The process also allows for fractionation; Splitting bonds and turning them into tradable tokens can make impractical investments a little more palatable. DBS announced today that it has priced blockchain bonds at $11.3 million, which will bolster its upcoming security token offering. STOs sell cryptocurrencies that represent off-chain securities (such as stocks). Similar to ICOs (initial coin offerings), it is a way to raise capital. Santander Bank, Société Générale and the World Bank have issued blockchain-based bonds in recent years. Last month, the European Investment Bank sold $121 million worth of two-year bonds in Ethereum. Eng-Kwok Seat Moey, head of capital markets at DBS, explained that the bank's digital bond is a gamble on the widespread adoption of blockchain. “We expect asset tokenization to become more mainstream as many of our clients begin to adopt the issuance of security tokens as part of their capital-raising campaigns,” it said in a statement. The bonds expire in six months and pay 0.60% per year. They can be purchased in batches for SGD 10,000 ($7,568). The bonds are traded on DBS's own crypto exchange Digital Exchange (DDEx), which was launched late last year. In addition to digital bonds, the exchange supports transactions between four fiat currencies (SGD, USD, HKD, JPY) and four cryptocurrencies (Bitcoin, Ether, Bitcoin Cash, XRP). DBS was the only accountant to handle the issue privately. DBS opens secondary market transactions to “institutional and accredited investors who are either members or valid end customers of DDEx members”. CompanyRead more

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