Gold is becoming an increasingly strategic asset class for investors and DBS is the latest bank to make efforts to improve accessibility with the introduction of a tokenized form of the physical precious metal in Singapore.
DBS will offer tokenized physical gold to customers, according to a statement, marking what the bank calls a market-first in Singapore. Each token is backed by one gram of physical gold held by DBS in a dedicated vault in Singapore. Retail customers will be able to access DBS Physical Gold Tokens on the bank’s mobile app, DBS digibank, and there are also explorations of plans underway to list the token on DBS Digital Exchange (DDEx), which is tailored for accredited investors and institutional partners.
The bank underlined key benefits to rolling out tokens linked to physical gold, including 24/7 convenience of trading, speed from the near-instant transactions of atomic settlement, affordability due to fractional ownership, and greater flexibility from the option to redeem physical gold.
Global trading hub
The introduction of the gold tokens is part of a broader trend in Singapore to make a nation-wide push to become a leading global hub for trading the precious metal. DBS itself is a member of the Gold Market Development Working Group established by the Monetary Authority of Singapore (MAS) and Singapore Bullion Market Association. Earlier this week, local rival Bank of Singapore launched an offering that allows clients to locally trade and store specific physical gold bars, identifiable by serial number.
“Gold as an asset class has taken off in recent years, demonstrating its enduring value as a safe haven and a critical diversifier in uncertain times,” commented James Tan, Group head, investment product and advisory, DBS.
“While our retail investors have been able to buy gold funds, access to physical gold has been largely available to only institutional and accredited investors. DBS has offered physical gold investments to wealth clients since 2013, and we are now leveraging tokenisation to broaden access, enabling more retail customers to invest in gold in a safe and meaningful way.”
