DBS expects tokenised finance investment to catch up with traditional payments, custody in 2-3 years

[SINGAPORE] DBS expects its investment in tokenised finance to catch up with – and potentially overtake – spending on traditional payments and custody within the next two to three years.

This is as the lender positions itself for what it sees as an “inflection point” in digital-asset adoption.

Investment in tokenised finance remains smaller than that for traditional payments and custody today, but its share has risen over the past few years, said Lim Soon Chong, group head of global transaction services at DBS. He did not disclose the current split.

“I expect this to be as large or even bigger in the next two (or) three years,” he told The Business Times in a recent interview.

Rather than commit to a fixed investment amount, DBS intends to scale its spending in tandem with the pace of adoption.

DBS processed about S$10 billion in tokenised payments cumulatively over the past two years, said Lim, as tokenisation moves from experimentation towards commercial use.

Tokenised finance broadly involves representing money or traditional financial assets as digital tokens on shared digital ledgers, potentially allowing faster settlement, round-the-clock liquidity and programmable transactions.

DBS had deliberately moved more cautiously when it began investing in the space around 2020, Lim said, as the network effects needed for tokenised payments and settlement have yet to emerge.

That is changing as more banks, regulators and institutional investors participate, prompting the lender to step up investment.

“We really see this as an inflection point, and the network effect is going to kick in,” he noted.

Much of the bank’s investment is going into new infrastructure and business processes, including security, customer-facing applications and systems that allow tokenised instruments to connect with existing payment rails and other financial intermediaries.

Adoption gathers pace

The push comes even as major cryptocurrency prices have fallen sharply from their peaks.

Lim said crypto prices were becoming a less useful gauge of broader digital-asset adoption, with activity among DBS’ clients continuing to grow.

The number of digital assets under custody at DBS rose about 50 to 70 per cent year on year in 2025, while accredited investors using the bank to invest in digital assets or related products grew at a double-digit pace. Participation among corporate and institutional clients also increased.

Revenue from its digital-assets business trebled in 2025, from around S$30 million in 2024, although Lim expects it to be lower this year.

That is largely due to falling cryptocurrency prices rather than weaker activity, he said, as digital assets such as Bitcoin and Ethereum still make up a much larger market than tokenised traditional assets and money, leaving revenue exposed to crypto-price movements.

DBS is instead focusing on the longer-term growth of tokenised assets and money.

In the near term, Lim sees more immediate commercial opportunities in investor access to digital assets and tokenised assets, as well as custody and related services, as these businesses are less dependent on multiple institutions adopting the same infrastructure before they can scale.

Tokenised money and payments could bring a more structural change over the longer term, but wider adoption requires common technology standards, acceptance among users and regulatory alignment, particularly for cross-border transactions, he said.

“The argument is not about the ‘what’ – the argument is about the ‘how’,” he explained, referring to questions over whether stablecoins, tokenised deposits or central bank digital currencies will be used, and how the systems will interoperate.

Building up digital-asset talent

DBS is also adding manpower to support the push, although Lim pointed out that specialised talent remains “difficult” to find.

The bank is bringing in employees dedicated to digital assets while also moving and retraining existing staff for the area. It has not set out a specific hiring target, with Lim saying he could not put a number on how many people would ultimately be needed.

He said that the challenge is finding employees who understand the technology while also being familiar with banking regulation, compliance and risk management.

Within DBS, a digital-assets task force draws people from markets, global transaction services, coverage, consumer banking and wealth management, technology and compliance.

Lim estimated that about 40 to 60 employees are actively working on or engaged with digital assets every day. Including those in areas such as risk management, compliance and finance who are involved either full-time or part-time, the number runs into the hundreds.

“The subject matter and understanding of what the technology does and what kind of change we need is broadening in the organisation,” he added.