Trust Estate

DBS Private Bank Unveils Digital Assets Trusts Offering

Tom Burroughes, Group Editor, 14 May 2021

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The offering is yet a further example of how the world of digital assets has gone increasingly mainstream, attracting major banks into the space which might once have been sceptical.

Singapore-based DBS Private Bank has introduced a trust solution for digital assets/aka cryptocurrencies via DBS Trustee – the bank’s wholly-owned, licensed trust company. The move is yet another example of large banks entering the space.

DBS said that its move allows clients to invest, custodise and manage digital assets in a “safe, secure, and structured manner.”

This offering is Asia’s first bank-backed trust solution for cryptocurrencies, DBS said in a statement today. The move builds on the DBS Digital Exchange that was launched last December. DDEX enables institutional investors and accredited investors to tap into a fully-integrated tokenisation, trading and custody ecosystem for digital assets. DDEX, launched in the first quarter of 2021, holds S$80 million in assets under custody, with trading volumes rising 10-fold to between S$30 and S$40 million. It has 120 clients.

The trust offering only covers cryptocurrencies hosted on DDEX (Bitcoin, Ether, Bitcoin Cash and XRP). The bank said clients can work with DBS Private Bank to integrate the assets into wealth succession plans. 

With major players including Julius Baer, Citigroup, UBS, JP Morgan and Morgan Stanley operating in the space, DBS’s move is an example of how digital assets – once seen as the concern of hackers, criminals and worriers about government-issued currencies – have gone “mainstream.”

“In recent years, more clients have expressed interest or are already invested in digital assets, and we expect this trend to accelerate as cryptocurrencies turn more mainstream. Our trust structure allows clients to conveniently hold these assets, with a peace of mind that they will be safely managed and passed on to their intended beneficiaries,” Joseph Poon, group head of DBS Private Bank, said. “As trusted advisors to our clients, we are very much committed to staying ahead of the curve and supporting their evolving investment needs. As we navigate today’s rapidly changing world and an ever-broadening array of investment opportunities, ensuring the long-term growth and protection of our clients’ wealth remains a keystone of our proposition.”

The bank said the trust solution provides assurance to clients, knowing that critical information about their digital assets (including access instructions, passwords, and information on the types of digital wallets, online exchanges and wallet back-ups, etc.) will be kept confidential after they die. Trusts are kept out of the probate process and do not normally become part of the public record. This also saves clients’ beneficiaries from having to deal with potential complexities that could arise during probate, which include jurisdictional estate taxes, DBS said. 

“Confidentiality, peace of mind and taxation often emerge as top-of-mind concerns in our conversations with clients, and we would advise them to set up trust structures rather than wills, which are subject to the probate process,” Lee Woon Shiu, regional head of family office, wealth planning and insurance solutions at DBS Private Bank, said. “This is especially so considering that international regulations and protocols are still nascent in the digital asset space, which could give rise to complications or unnecessary confusion if proper measures are not in place to prevent them. By keeping their DDEX-hosted digital assets in a trust administered by professional licensed trustees such as DBS Trustee, our clients can be assured that the succession planning of their digital asset wealth is being taken care of by experienced professionals.”

Bitcoin prices remain volatile. The cryptocurrency fetched about $49,382 per coin as of 06:50 local London time (source: Coindesk), having fallen from above $63,000 per coin in mid-April. See here for an overview of two videoes we recently produced about the space.

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