DBS Bank, a Singapore-based multinational banking corporation, has issued the world’s first security token offering, or STO, in the form of a digital bond.
The DBS digital bond is priced at $11.35 million and has a six-month tenor with a 0.60 percent annual coupon rate. The offering was conducted through a private placement hosted by DBS Digital Exchange, or DDEx. And was the first STO on the platform?
To encourage investor participation, the bond will be traded in 10,000 Singapore dollar board lots (roughly $7,560). A significant reduction from the traditional wholesale bond’s 250,000 Singapore dollar board lots.
Digital bonds will be traded by DDEx clients and institutional investors.
Clients of DDEx who are accredited or institutional investors will be able to trade the digital bonds on the secondary market.
DBS hopes that its offering will pave the way for other issuers to use the DDEx platform to launch security token offerings.
DBS’s Group Head of Capital Markets, Eng-Kwok Seat Moey. Emphasized that security tokens are an efficient and innovative way to raise capital in the Asia-Pacific region. Which accounts for more than 30% of global private equity markets. He explained:
“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. We expect asset tokenisation to increasingly become more mainstream. As more of our clients start to embrace security token issuance as part of their capital fund raising.”
Moey estimates that daily volumes on DDEx have increased by 900 percent. Since its launch in December 2020, the platform now serving over 120 traders. DBS’s crypto custody service also manages assets worth more than $60 million.