Sygnum to Channel $50M Investment into Tokenized Reserve Strategy with Matter Labs
Summary:
Swiss digital asset bank, Sygnum, plans to invest $50 million in the Fidelity Institutional Liquidity Fund on behalf of Matter Labs, following a tokenization strategy to move its treasury reserves on-chain. These funds, to be tokenized on the Ethereum-based zkSync layer-2 blockchain, exemplify Matter Labs' efforts to increase transparency of its reserves. This represents Sygnum's first foray into tokenizing traditional securities. Sygnum made history in 2020 by being the first bank to tokenize its assets and began offering cryptocurrency staking to its clients. However, the bank remains unavailable to clients from the United States.
Sygnum, a digital asset bank headquartered in Switzerland, plans to channel a $50 million investment into the Fidelity Institutional Liquidity Fund on Matter Labs' behalf. The forthcoming act of tokenizing these funds paves the way for Matter Labs' grand strategy to transition its entire treasury reserves to on-chain with reputable custodians. Matter Labs oversees the tokenization of these funds onto the zkSync layer-2 blockchain, an Ethereum-based solution. The tokenized funds are essentially a slice of Matter Labs' assets in the Fidelity Institutional Liquidity Fund, an Irish-domiciled composition of money-market funds worth $6.3 billion.
This tokenization move is purposed to ensure clarity in Matter Labs' proof of reserves. Marco Cora, the Senior Vice President of Business and Operations at Matter Labs, emphasized the firm's dedication to transparency and the institutional-level security that the zkSync blockchain offers by moving $50 million of their treasury reserves onto the blockchain.
Sygnum is venturing into tokenizing traditional securities for the first time. At the ongoing Digital Asset Summit 2024 in London, Sygnum's co-founder and Group CEO, Mathias Imbach, emphasized the company's belief in an amalgam of compliance, regulation, and permissionless public blockchains. He sees Sygnum playing an integral role in fostering cooperation among various ecosystem participants.
zkSync, a blockchain solution created in 2018, propels scalability in Ethereum DApps. Having garnered $200 million in Series C funding in November 2022, it launched its public mainnet in April 2023. According to L2BEAT, it achieved a peak total value locked (TVL) of $870 million on March 10 and held a TVL of $715 million as of March 19.
Sygnum set a precedent in 2020 by becoming the first bank to tokenize its assets. It also availed its clients of cryptocurrency staking that year with options like Internet Computer and Tezos, subsequently including Ether and Cardano the following year. In terms of legal developments, Sygnum’s Singapore subsidiary was granted a Major Payment Institution license in October 2023. This permits it to extend crypto brokerage services to certified and institutional investors, although it remains closed to clients from the United States.
Published At
3/19/2024 9:20:00 PM
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