DBS launches tokenised structured notes on Ethereum public blockchain

DBS has announced the launch of tokenised structured notes on the Ethereum public blockchain, enabling investors to trade these instruments with greater flexibility.

Structured notes are financial instruments whose value is linked to that of an underlying asset or index. Its structure is often tailored to meet investors’ unique requirements, such as boosting returns or reducing downside losses.

The notes will be distributed on the Singapore exchanges ADDX, DigiFT and HydraX, boosting investor access amid growing interest in crypto investments in the Republic.

Merchant services received a two-year quarterly high of nearly US$1 billion in crypto in the second quarter of 2024, according to blockchain analysis firm Chainalysis. Not only that, 26 per cent of Singapore residents owned digital assets in 2024, up from 24.4 per cent in 2023, said crypto payments firm Triple-A.

DBS itself launched cryptocurrency-linked structured notes in September 2024 for eligible clients, alongside cryptocurrency options trading. Its clients executed over US$1 billion of trades involving these instruments in the first half of 2025, with trade volumes growing almost 60 per cent from the first to the second quarter this year.

The move comes at a time when the Monetary Authority of Singapore has been encouraging initiatives such as Project Guardian. That collaborative initiative between policymakers and the financial industry aims to enhance the liquidity and efficiency of financial markets through asset tokenisation.

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DBS said on Thursday (Aug 21) that it will also tokenise common structured notes, such as equity-linked notes and credit-linked notes.

Tokenisation: the next frontier of financial markets infrastructure

Structured notes are complex instruments that usually require an investment of at least US$100,000 and are often non-fungible.

Tokenisation instead creates individual tokens each representing a mere US$1,000 share of the original note. These tokens are also identical to each other, making them more fungible.

This allows for easier access to structured note tokens, with investors enjoying greater flexibility with their investments.

The DBS partnership with third-party ADDX, DigiFT and HydraX “broadens access to tokenised structured notes for accredited and institutional investors who are not DBS clients”, said the bank in a statement.

For the first token distribution, DBS said that it will tokenise cash-settled cryptocurrency-linked participation notes for distribution across the third-party digital platforms.

“The note structure provides investors with a cash payout when cryptocurrency prices rise, enabling them to build exposure to the asset class without having to manage any cryptocurrency,” it added. “The note is also structured to mitigate potential losses should cryptocurrency prices decline.”

Li Zhen, DBS’ head of foreign exchange and digital assets, global financial markets, described asset tokenisation as the “next frontier of financial markets infrastructure”.

He added: “By leveraging DBS’ strong credit ratings, partnerships and capabilities, more investors can now tap our solutions to better manage their portfolios.”