Digital assets: DBS rolls out blockchain-based banking for institutions

DBS Bank has launched its “DBS Token Services” for real-time blockchain payment settlements, using smart contracts for enhanced security and transparency – the new suite of blockchain-powered services for its institutional clients facilitating real-time payment settlements using the bank’s permissioned blockchain.

Using a permissioned blockchain provides DBS full control over these services, enabling the bank to harness the benefits of blockchain technology while adhering to compliance standards - Lim Soon Chong, DBS

Permissioned blockchains are networks with an access layer that allows participants to only interact with a pre-approved level of authority. While these blockchains use distributed ledger technology, they are not fully decentralized.

The bank said that smart contracts would enable institutions to govern funds with predefined conditions, which would enhance security and transparency.

‘Using a permissioned blockchain provides DBS full control over these services, enabling the bank to harness the benefits of blockchain technology while adhering to compliance standards,’ stated Lim Soon Chong (pictured), the group head of global transaction services at DBS Bank, adding ‘the tokenization and smart contracts allow DBS Token Services to optimize liquidity management and streamline operational workflows for its clients’.

In addition to its new token services and treasury tokens pilot, DBS has also introduced other blockchain-related developments this year – in mid-September the bank said it would launch over-the-counter (OTC) crypto options trading and structured notes for institutional investors.

SDX, Rulematch partner to transform crypto trading and custody market

SDX and Rulematch have announced a partnership to offer financial institutions an integrated solution to trade, settle and manage crypto assets.

Both companies will collaborate to deliver a complete, end-to-end, institutional-grade solution for banks and financial institutions.

Under the terms of the partnership, institutions will be able to trade on Rulematch’s platform with post-trade clearing and settlement, eliminating the need to pre-finance their trading activities. Using the integrated solution of SDX and Rulematch, they can hold crypto assets including crypto ETPs and structured products in SDX’s secure custody and easily manage clearing collateral on a dedicated SDX account.

The integration removes the need to hold collateral with the trading venue and investors will also be able to increase their crypto collateral positions within seconds, avoiding delays often associated with traditional on-chain transactions.

The integrated solution with SDX’s custody services and Rulematch’s trading and settlement platform will be available from Q4 2024.

‘Until now, the digital asset space has been held back by concerns around speed, compliance and fragmentation. Our partnership with Rulematch tackles these issues head-on by providing transparency, capital efficiency and, crucially, a clear separation of trading and custody roles,’ said David Newns (above right), head of SIX Digital Exchange.

VanEck introduces staking rewards to Solana ETN

VanEck has brought in staking rewards to its Solana exchange-traded note (ETN) in Europe, according to the US asset manager’s announcement on Monday (21 October). 

The staking rewards will be included in the end-of-day net asset value (NAV) daily, with the asset manager managing the staking exposure to ensure daily liquidity, Matthew Sigel (below right), head of digital assets research at VanEck said in a post on X.

Staking is the use of capital at risk in the form of locked tokens to secure the blockchain network and earn yield for providing the resource. Investors can earn passive income through the ETN and access to staking yield, the asset manager said.

VanEck highlighted its staking approach is fully non-custodial, which means SOL remains in cold storage, and no lending of assets takes place. The asset manager utilises the physical Solana’s cryptocurrency SOL held by the ETN for staking by instructing the custodian to delegate SOL to a validator.

First incepted on September 2021, the VanEck Solana ETN’s assets under management sat around US$81m as of 23 October. It’s available for trading like an ETF across four exchanges (Deutsche Boerse, Six Swiss Exchange, Euronext Amsterdam, and Euronext Pairs).

VSE subsidiary front-runs securities settlement via DLT

The Central Securities Depository in Prague (CSD Prague) – a subsidiary of the Prague Stock Exchange and part of the Vienna-Prague Stock Exchange Group – has been authorised to operate a distributed ledger technology (DLT) market infrastructure.

CSD Prague is the first institution to receive this authorisation under the EU's DLT pilot regime. The approval was granted by the Czech National Bank and confirmed by the European Securities and Markets Authority (Esma).

From 18 November 2024, CSD Prague offers issuers of securities to register their issues in the newly created DLT-based register.

‘DLT is often associated with blockchain and cryptocurrencies, but it also presents a valuable opportunity for us as an infrastructure service provider to enhance efficiency and transparency in securities settlement,’ said Christoph Boschan (right), CEO of the Vienna Stock Exchange.

The technology enables the management of a securities account and subsequently the transfer of shares or bonds to this account as part of an initial subscription, a capital increase or a transfer from another account on the basis of an agreement with the counterparty - these transactions can be carried out with or without cash settlement.

Settlement via DLT has the potential to simplify the process of booking securities reducing the administrative burden for both issuers and security holders. At the same time, the transparency and security of the current central CSD register will be maintained.

MarketVector deploys index into 21Shares crypto ETP

Index provider MarketVector Indexes has deployed its self-developed 21Shares Future of Crypto Index to the exchange-traded product (ETP) issued by 21Shares, available for trading on Euronext Amsterdam and Euronext Paris starting 9 October.

The 21Shares Future of Crypto Index ETP covers six themes exposure, consisting of payment platforms, smart contract platforms, blockchain accelerators, decentralised finance, AI and data solutions, and social and gaming.

As of 24 October, the product’s assets under management hovered at around US$2.1m, with a year-to-date return reaching 6.80 %, data from 21Shares shows.

The latest development at MarketVector Indexes came after the Frankfurt-based index provider licensed its TM Ethereum Benchmark Rate (EBR) to asset manager VanEck in which the asset manager launched the first spot Ethereum-exposed ETF in the US in July.

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