Goldman and DBS Complete 1st-Ever OTC Interbank Crypto Options Trade

DBS and Goldman Sachs have conducted the first-ever over-the-counter cryptocurrency options trade between two banks.

“The involvement of two trusted, well-capitalized banks in this pioneer transaction marks a new milestone in the maturation of digital assets in the region,” Singapore-based DBS said in a news release Wednesday (Oct. 29).

“It also demonstrates how the ecosystem is increasingly adopting risk management best practices that form the bedrock of traditional asset classes.”

According to the release, the transaction involved trading cash-settled over-the-counter (OTC) Bitcoin and Ether options. These trades let firms offering cryptocurrency-linked products better manage the risk profile of their crypto exposures, DBS said.

The bank also noted this is happening amid rising demand for cryptocurrency-linked products, as accredited and institutional investors gain exposure to the asset class.

In the first half of this year, DBS clients executed more than $1 billion in trades involving cryptocurrency options and structured notes, with trade volumes increasing nearly 60% between the first and second quarters of the year.

“Our trade with Goldman Sachs highlights how platforms can now tap the strong credit ratings and structuring capabilities of banks to bring the best practices of traditional finance into the digital asset ecosystem,” said Jacky Tai, Group Head of Trading and Structuring, Global Financial Markets, DBS.

In related news, PYMNTS wrote last week about the way stablecoins are “arguably giving cryptocurrency mainstream legitimacy.”

That’s the case at least in the U.S., where — during the Federal Reserve’s recent Payments Innovation Conference — Fed Governor Christopher Waller advanced the notion of a “skinny” or “streamlined” master account, a type of access to the Fed’s settlement system designed for non-bank payments companies, including stablecoin issuers.

Under this proposal, firms would be granted direct access to Fed payment rails, subject to tighter conditions: no discount-window borrowing, no interest on reserve balances, capped balances, and restrictions on operational features. Critically, this access is limited to payment-centric activity, and not full banking operations.

At the same time, stablecoin issuers such as Circle, Kraken, Bridge (Stripe) and Paxos Trust Company are scrambling for federal trust or bank charters under the Office of the Comptroller of the Currency (OCC).

“Together, these developments mark a strategic pivot. Stablecoin issuers are no longer operating on the periphery of the banking system,” PYMNTS wrote. “They are seeking to become part of it. And regulators may be opening the doors, albeit cautiously.”