Custody Evolution In the Era of Asset Convergence
The global securities and investment landscape is rapidly being reshaped. Among the challenging market conditions of recent years, institutional investors have turned to resilience-building as their central driver of growth. “The way our clients seek to build resilience varies across businesses, segments, and markets,” says Ee Fong Soh, Group Head of Financial Institutions, Securities & Fiduciary Services, Global Transaction Services, DBS Bank. “Yet we see a common dual objective across the board: the pursuit of diversification paired with an increased focus on asset safety.”
This objective – coupled with technological and regulatory advancements – is driving a monumental shift towards the coexistence and convergence of digital and traditional asset ecosystems. The parallel demand for both asset classes is particularly pronounced in Asia. “Huge leaps in digital asset product optionality are being made alongside growing demand for more traditionally perceived safe asset classes,” explains Soh.
This analogous demand has quickly raised expectations for custodians serving the region. In a recent survey of global financial institutions, 83.8% of respondents in APAC named custody as an institutional priority for digital asset use cases in the next 24 months1. This made custody the leading digital-asset priority in APAC – compared to only the third-ranked priority at the global level.
Two-track innovation
While digital asset adoption is growing rapidly in Asia, traditional asset classes remain the dominant contributor to institutional portfolios. As such, the best custodians must innovate in both the traditional and digital spaces. Soh notes that DBS has in recent years been working on maintaining a balance of progress in both.
“By pioneering solutions in both digital and traditional asset custody, we’ve empowered clients to create new operational efficiencies and growth possibilities.”
Ee Fong Soh, Group Head of Financial Institutions, Securities & Fiduciary Services, Global Transaction Services, DBS Bank
In traditional assets, infrastructure enhancements across Asia are enabling investors to diversify market access. For DBS, being at the forefront of the relevant advancements has enabled the bank to provide its clients with first-mover advantages. For example, in 2025 it became the first foreign bank to be approved as an RMB clearing bank, and to operate in China’s OTC bond market. Combined with offshore custody services capabilities, DBS’ institutional clients now benefit from a broader and more diverse range of market opportunities.
Beyond opportunity expansion, unlocking efficiency gains for clients has been a long-time priority for DBS. One example in 2025 was the introduction of its ‘One Bank’ model for asset managers, combining both banking and custody solutions in one place.
In digital assets, partnerships have been a critical enabler of opportunities. “Our strategic alliance with Franklin Templeton and Ripple last year set a milestone in expanding optionality to serve clients’ diversification needs,” says Soh. Together, these institutions are introducing innovative trading and lending solutions powered by tokenised money market funds.
Elsewhere, DBS recently became the first Asian bank to offer collateral agent services for crypto trading, enabling both crypto exchanges and their members to boost trading capacity and volumes. It also issued its first tokenised structured notes on a public blockchain, with distribution across multiple digital platforms.
Evolution built on trust
With rising demand at both ends of the asset spectrum, and given the ongoing technological and regulatory changes, custodians must continue to evolve at pace.
Soh sees countless possibilities that could further elevate custodial services in Asia. “One exciting initiative underway at DBS is the establishment and expansion of an ecosystem for physical gold, with both custody and tokenisation,” she explains. In a first for the Singapore market, DBS will tokenise, distribute, and manage physical gold tokens entirely in-house. The bank also has plans to list the token on its DBS Digital Exchange (DDEx) and later expand the service to Hong Kong.
Irrespective of the opportunities and advancements ahead, safety must remain a priority. This should be driven by custodians themselves, with asset safeguarding upheld as a central promise in both the day-to-day and across innovation processes. Trust is a critical foundation, and investors are likely to place greater scrutiny on the track records of custodian partners.
“Prioritising trust and safety will ultimately provide the bedrock that enables resilience building in the blended world of digital and traditional investing,” concludes Soh.
