According to DBS's announcement, its digital exchange will facilitate trading of four fiat currencies, namely the Singapore Dollar, United States Dollar, Hong Kong Dollar and Japanese Yen and four cryptocurrencies namely Bitcoin, Bitcoin Cash, Ether and XRP and enable spot exchanges between the aforementioned fiat currencies and cryptocurrencies.
The digital exchange will also provide a platform for issuance and trading of digital tokens backed by financial assets, such as shares in unlisted companies, bonds and private equity funds, as well as custody services (including cryptographic keys) for digital assets.
DBS also announced that the
The digital exchange will be accessible only to institutional and accredited investors.
According to media reports, the cryptocurrency exchange is expected to be operational within one week from the announcement by DBS while the securities platform is expected to be launched by the first quarter of 2021.2
North of the causeway
In
- Digital asset exchange: an entity that seeks to operate a platform for trading of digital assets must be registered as a recognised market operator under the RMO Guidelines;
- Hosting initial exchange offerings: an entity that seeks to operate an electronic platform for hosting initial offerings of digital tokens must be registered as an initial exchange operator ('IEO operator') under the Digital Assets Guidelines;
- Custody of digital assets: an entity that seeks to provide services for safekeeping, storing or maintaining custody of digital assets must be registered as a digital asset custodian under the Digital Assets Guidelines; and
- Fund raising through digital token offering: an entity that seeks to raise funds through an offering of digital tokens must do so under the Digital Assets Guidelines through an initial exchange offering approved by a registered IEO operator.
To-date, the SC has registered three entities to operate digital asset exchanges, namely
The trading of digital asset appears to have been well received by the Malaysian public. The three digital asset exchanges in
The Digital Assets Guidelines were issued on
Comments
The combination of liquidity in the financial markets and the search by investors for higher yields and for alternative classes of investments have led to the resurgence in the prices of cryptocurrencies, with bitcoin hitting an all-time high of
The significant increase in trading volumes of cryptocurrencies in year 2020, the emergence of institutional investors and funds that specialise in investing in such assets and the emergence of DBS and SGX as players in the digital assets space are signs of the growing acceptance of digital assets as an alternative class of investment. These trends suggest that digital assets may have come of age.10
Footnotes
1 The announcement by DBS can be accessed here. Further details of the DBS digital exchange are available here.
2 ' DBS to launch digital currency exchange; trading may start as early as next week'; The Straits Times (online);
3 SC's media release of
4 SC's media release of
5 ' Luno processes over
6 The SC's media release of
7 ' How America investors are gobbling up booming bitcoin'; The Star Online;
8 ' Bitcoin's rebound puts
9 ' Can cryptos be an asset class?'; StarBiz;
10 Rightly or wrongly, the oft-cited concerns over risk of theft of digital assets through cyber-crimes and heightened money laundering risks posed by digital assets appear to have given way to the quest for higher returns on investments.
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