Regulators ‘Rightfully Concerned’, claims CEO as Singapore’s Largest Bank Backtracks on Retail Crypto
Singapore’s DBS Bank has dropped its plans to open a crypto trading desk for retail investors by the year-end due to regulatory concerns. While the bank’s CEO acknowledged that, sooner or later, the world would adopt crypto as an asset class, he claimed this would not happen in the near future.
DBS, Singapore’s Largest Bank, Backtracks on Retail Crypto Trading
In mid-February, DBS’s CEO Piyush Gupta announced that the bank would expand cryptocurrency trading to retail traders by the end of 2022. “We are starting the initial work to expand it beyond the current investor base,” the CEO said at the time.
However, at an annual general meeting last week, Gupta revealed the shift in plans. He cited regulatory troubles as the main cause, saying that most regulators are “rightfully concerned” about retail access to digital assets. He said:
“Left to ourselves, as I have said before, I think over time, digital currencies and crypto assets are going to be pervasive. And therefore, sooner or later, I think the world will have to come to terms with this as an asset class. Not to replace money […] but certainly, as a store value, I think it will have a role to play.”
Gupta added that he does not expect the bank to extend its crypto services to retail investors anytime soon. “But I’m not holding my breath. I don’t think the environment will allow us to make it available to retail anytime in the immediate future,” the CEO said.
The Development Bank of Singapore, or DBS, is a multinational banking and financial services corporation running over 250 branches across 18 nations and 50 cities. As per a 2021 ranking by Forbes, DBS is the largest bank in Southeast Asia, ahead of the Oversea-Chinese Banking Corp (OCBC) Bank with a $95.5 billion market cap.
In December 2020, the bank launched a digital asset trading desk called the DBS Digital Exchange (DDEx), providing some institutional and accredited investors with a regulated platform to tap into the growing digital asset space. By the end of 2021, digital assets custody on the DDEx surpassed S$800 million ($590 million) while overall trading volume crossed S$1 billion ($737 million).
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Crypto Regulation Tightens Up in Singapore
Singapore, a key financial center in Asia, has become a hotbed for crypto firms, particularly after China’s crackdown on crypto last year. This is largely attributed to the country’s progressive stance toward the emerging digital asset class.
The Money Authority of Singapore (MAS), the central bank of Singapore, passed legislation to regulate the crypto industry under its Payment Services Act (PS Act) in 2019. Back then, the legislation mainly focused on money laundering and terrorist financing risks.
However, following the recent exponential growth in crypto adoption, the MAS has ramped up its efforts to overreach the industry. Earlier this year, the MAS ordered Digital Payment Token (DPT) service providers not to promote their services to the general public in Singapore.
Moreover, the MAS has consistently warned that trading crypto-assets is highly risky and not suitable for the general public. So far, the Singapore regulator has not allowed crypto services for retail. And in January 2022, the MAS even issued guidelines discouraging retail investors from trading cryptocurrency.
Do you support Gupta’s claim that regulators are “rightfully concerned” about retail access to cryptocurrencies? Let us know in the comments below.