DBS Digital Exchange CEO says investors prefer regulated platforms over yield
Singaporean DBS Financial institution’s Digital Change (DDEx) CEO Lionel Lim mentioned that buyers search for regulated platforms as a substitute of looking for the choices that present the perfect yield, in response to Forkast Information.
Lim gave an interview to Forkast Information reporters the place he cited the devastating occasions of 2022 and the way they modified investor behaviors in the direction of searching for security. Lim said:
“The blind chase for yield is over. Traders at the moment are searching for secure harbors and like trusted, regulated platforms to entry the market.”
The DDEx recorded an 80% enhance in Bitcoin (BTC) buying and selling volumes and doubled the variety of its registered customers in 2022. Lim referred to those numbers and mentioned that ” DBS has been a beneficiary of this broader flight of security.”
In accordance with Lim, DDEx checks the purity of all cash getting into its custody and complies with all of the anti-money laundering (AML) and know-your-customer (KYC) guidelines obligatory for banks.
Mentioning the antagonistic results of the occasions of the 2022 bear market, Lim mentioned that he believed 2023 can be the 12 months for the digital asset business to rebuild belief and confidence. He argued that bank-backed exchanges like DDEx would play a significant function on this course of. Subsequently, despite the fact that DDEx is trying to develop the providers it provides its prospects, it prioritizes regulatory compliance and security product selection.
Lim additionally identified that the DDEX doesn’t maintain any of its prospects’ belongings below its custody. As a substitute, all of the belongings are saved in chilly wallets owned by the DBS financial institution, which provides an additional layer of security, in response to Lim.
Commenting additional on the subject of segregation, Lim said:
“Centralized exchanges will proceed to retain their reputation due to their relative ease of use, however we anticipate a shift in how centralized exchanges function and a transfer to undertake bank-grade infrastructure and danger administration.
One apparent low-hanging fruit is the clear segregation between custody and buying and selling belongings.
On Feb. 15, the U.S. Securities and Change Fee (SEC) chair Gary Gensler voiced an analogous opinion with regard to segregation. Gensler urged increasing the federal custody necessities to incorporate crypto, which might mandate crypto exchanges to retailer their buyer’s belongings individually from the exchanges.