DBS group chief executive Piyush Gupta expressed great confidence not only about the future of crypto investments but also the bank’s advantage as a first-mover following the official launch of its digital exchange.
Nearly two months after rumors first surfaced, DBS has officially gone to market with its new digital asset exchange. But while media headlines were initially focused on the prospects of decentralized cryptocurrencies, the bank’s group CEO Piyush Gupta placed emphasis on the potential of asset tokenization.
More than just a new medium to own assets, tokenization and blockchain technology have lofty promises to meet such as enhanced data capabilities, liberalized access and faster trading speeds.
«We are on the cusp of massive tokenization,» said Gupta during a virtual discussion yesterday. «Eventually it will be a competitive market. The question is what allows you to differentiate.»
First-Mover Advantage
As the first major bank to launch a crypto exchange, Gupta said this is a key differentiator for DBS, at least initially. He underlines that this is not just a matter of risk-taking or timing but rather hurdles preventing competitors from outracing the Singaporean lender.
«There's been this cloud on crypto-assets, particularly cryptocurrencies,» he explained.
Gupta highlighted the two key hurdles that have prevented activity or slowed progress amongst other banks. Firstly is the insufficient comfort with understanding the implications of cryptocurrency-related activities. Secondly is the establishment of robust processes and controls around these activities especially with regards to anti-money laundering and know-your-client rules.
Next Stage
In the next phase, Gupta said that the bank’s first-mover status has helped build a strong pipeline of business and the exchange could break even within a year after trading goes live, which expected to be as early as next week.
But he acknowledges that the first-mover advantage can only take the bank so far and that user experience in the long-term will be the ultimate differentiator across end-to-end services including listing, trading, custody and more.
«The exponential pace of asset digitalization provides immense opportunities to reshape capital markets,» he said in a separate statement. «For Singapore to become even more competitive as a global financial hub, we have to prepare ourselves to welcome the mainstream adoption of digital assets and currency trading.»
