The power of tokenization can fundamentally transform the fabric of the financial system, Singapore’s DBS Bank CEO Piyush Gupta told the Consensus by CoinDesk 2021 conference taking place this week.

Fast Facts:

  • Gupta sees tokenized assets as a new asset class, saying: “In reality, every asset class is going to get tokenized, and that includes whether it’s physical property or paintings or buildings, what have you. The notion of tokenization extends well beyond currency as a medium of exchange.”
  • Tokenization is “fundamentally a lot more powerful than pure digitization of an asset or money” as it allows for fractionalized ownership, real-time settlement and programmability, Gupta said, adding that central banks such as the Monetary Authority of Singapore were playing a more active role in facilitating the transition to tokenized infrastructure.
  • Earlier this month, DBS Bank, Singapore Exchange, Standard Chartered Bank and state-owned investment firm Temasek announced that they were joining forces to set up a global exchange and marketplace for high-quality carbon credits. “Given so many companies have made the net-zero commitments, we believe that there is, over the next decade, going to be a dramatic explosion in the voluntary carbon market, and therefore the timing is right, and being able to essentially tokenize and trade these assets is going to be a strategic opportunity,” Gupta said.
  • Last December, DBS Bank — Southeast Asia’s largest lender by assets — launched the DBS Digital Exchange, which leverages blockchain technology to provide tokenization, trading and custody for digital assets. DBS is in the process of launching a fixed-income token in the next couple of days. In April, DBS announced that it was partnering with U.S. investment bank J.P. Morgan and Temasek to form a technology company — Partior — to develop a blockchain-based platform for payments.
  • “We increasingly think of ourselves as a technology company offering financial services, and less as a traditional bank, and frankly the fact that we have about twice as many engineers on our payroll as bankers is perhaps testimony to the shift in the nature of the company that we are,” Gupta said.