Tag: digital exchange

German Stock Exchange Subsidiary Blocknox Unveils Cryptocurrency Custody Services to Institutional Clients

German Stock Exchange Boerse Stuttgart has announced that its subsidiary Blocknox will begin providing digital asset and cryptocurrency custody services to institutional clients.

Blocknox was established in January 2019 as a crypto custody service for users of the BISON app. In September 2019, this service was extended to users of Boerse Stuttgart Digital Exchange (BSDEX). The latest announcement involves an expansion of the service to institutional clients like asset managers, banks, and fintechs.

Dr. Ulli Spankowski, managing director of Blocknox, commented on the development being made within the firm. He said, “Blocknox is a pioneer leading in this field in Germany. The company has already been offering a custodian of crypto assets for more than one year. We now want institutional clients to benefit from our set-up and experience as well. They can utilize Blocknox’s reliable custody as a building block for their own services around digital assets.”

Boerse Stuttgart stated that a “multilevel security concept” has been built and deployed at Blocknox to protect assets under custody.

With new regulations for Germany-based crypto services introduced in January 2020, Blocknox revealed that it has already informed the supervisory authorities for its intent to apply for the required license. This means that Blocknox can provide custody services on a provisional basis.  The company intends to submit the final application before the specified deadline to become a regulated financial service provider.

Dr. Spankowski added, “We welcome the new legislation of crypto custody as an important step towards greater professionalism of the industry. Due to the new regulation, more institutional players are likely to enter the cryptocurrency market. We expect to support them as a crypto provider.”

However, Blocknox will experience significant competition. Last week 40 banks approached Germany’s financial regulator BaFin requesting permission to get into the digital asset custody business. But Blocknox has slightly moved forward with its lead response timing over the banks.  

Image via Boerse Stuttgart

DBS Bank Issues $15M Digital Bonds through DBS Digital Exchange

Singapore-based bank DBS Bank announced the issuance of digital bonds worth 15 million SGD (US$11.3 million) in its first security token offering (STO).

DBS Bank will issue digital bonds with a maturity of 6 months and an annualized coupon rate of 0.6% through its Digital Exchange (DDEx).

Unlike the traditional public bond development approach, this digital bond issuance was completed by private placement. And DBS Bank is the only book-runner for this transaction. Compared with traditional wholesale bonds, the face value will often require approximately SGD 250,000 and multiples of the investment and transaction amount.

To encourage investors to participate more widely, DBS Bank has lowered the standard accordingly, and digital bonds will be traded at 10,000 Singapore dollars per lot.

DBS Digital Exchange (DDEx) was launched in December 2020, aiming to use blockchain technology to provide customers with a safe and transparent comprehensive digital asset ecosystem trading platform.

The bank stated that DDEx had enjoyed strong market appeal since its launch. DBS Bank also stated that its digital bonds conform to the current bond legal framework. Investors do not need to worry about legal issues and provide the same legal certainty and rights protection as traditional bonds.

Head of Capital Market Group Eng-Kwok Seat Moey stated: 

 “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.

Clifford Lee, Global Head of Fixed Income at DBS, stated that the issuance of digital bonds would be an important step in traditional bond issuance to a more inclusive digital ecosystem. He added that:

“While most bond tokenization exercises announced in Asia to date tend to be repackaged forms of a conventional bond issue, the current transaction directly combines existing legal and tax infrastructure requirements with a direct issuance on the digital exchange in smaller lot sizes.”

This bond token structure was only made possible because of the progressive development of Singapore’s legal and tax infrastructure, which can facilitate more STO issuances to broaden and deepen our capital markets.

With the listing and trading of digital bonds on DDEx, these securities can now be secondary traded between accredited investors and institutions that are DDEx members or applicable end customers.

On May 14, DBS bank announced that the company has started offering trust services for cryptocurrencies, allowing their premium clients to include the emerging asset class in their succession plans.

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