Singapore state-owned megabank DBS Group is planning to expand its cryptocurrency services to Hong Kong as the Chinese territory pushes to become a digital asset hub.
DBS Bank plans to apply for a license to allow it to offer crypto trading services to Hong Kong customers, Bloomberg reported on Feb. 13.
“We are planning to apply for a license in Hong Kong so that the bank could sell digital assets to our Hong Kong customers,” DBS Bank Hong Kong CEO Sebastian Paredes said.
Paredes noted that DBS welcomes new crypto-related policies in Hong Kong, and is also “very sensitive” to the risks associated with digital assets. The bank is willing to become one of the first lenders offering crypto in Hong Kong once the regulations are fully clear and DBS “understands exactly the framework,” he added.
DBS Bank made a massive move into the cryptocurrency industry a few years ago, launching its institutional crypto exchange in Singapore in late 2020. The company has also been working to expand its crypto platform to retail investors and applying decentralized finance technology to joint projects with Singapore’s central bank.
The news comes amid DBS announcing that its net profit rose 20% to record 8.19 billion Singaporean dollars (SGD), or $6.7 billion, in 2022. Total income increased 16% to 16.5 billion SGD ($12.4 billion), crossing 16 billion SGD for the first time in history.
DBS Bank’s plans to expand to Hong Kong come amid China’s special administrative region continuing to reaffirm its pro-crypto stance. In January, Hong Kong’s financial secretary Paul Chan declared that the Hong Kong government is open to collaboration with crypto and fintech startups in 2023. The official also said that a lot of industry firms expressed willingness to expand operations in Hong Kong or to go public on local exchanges.
As previously reported, Hong Kong lawmakers passed legislation to set up a licensing system for virtual asset service providers in December 2022. The new regulatory framework is designed to provide the same degree of market recognition to crypto exchanges as the one that is currently applicable to traditional financial institutions.
While Hong Kong authorities have been opening up to crypto recently, Singapore has taken a more stringent approach to the crypto industry in the aftermath of major industry failures in 2022. In October, the Monetary Authority of Singapore proposed to ban all forms of cryptocurrency credit following the bankruptcy of the Singaporean crypto hedge fund Three Arrows Capital.