Sygnum, a Switzerland-based digital asset banking group, is set to invest $50 million in the Fidelity Institutional Liquidity Fund on behalf of its client Matter Labs. This investment marks the beginning of Matter Labs' strategic initiative to migrate all its inventory reserves onto-chain with institutional custodians. The funds will undergo tokenization as the initial step in this endeavor, leveraging the Ethereum-based zkSync layer 2 blockchain curated by Matter Labs.
Representing a portion of Matter Labs' holdings in the Fidelity Institutional Liquidity Fund, which amounts to a $6.3 billion umbrella of open-end money market funds domiciled in Ireland, the tokenized funds will offer transparency into Matter Labs' proof of reserve. Marco Cora, senior vice president of business and operations at Matter Labs, emphasized the move's significance, citing institutional-grade security and a commitment to transparency.
Notably, this marks Sygnum's first foray into tokenizing traditional securities, signaling a strategic shift in its operational landscape. Mathias Imbach, co-founder and group CEO of Sygnum, elaborated on the deal during the ongoing Digital Asset Summit 2024 in London. He emphasized the bank's belief in permissionless public blockchains while also underscoring the importance of compliance and regulation in fostering collaboration within the ecosystem.
Founded in 2018, the zkSync blockchain emerged to address scalability challenges for Ethereum DApps. After securing $200 million in Series C funding in November 2022, its public mainnet went live in April 2023. The platform has witnessed significant growth, with its total value locked (TVL) reaching milestones, reflecting its increasing adoption and utility within the blockchain ecosystem.
Sygnum boasts a track record of innovation, having become the first bank to tokenize its assets in 2020. Additionally, it has expanded its service offerings to include cryptocurrency staking, catering to a diverse range of digital asset investors. With its Singapore subsidiary obtaining a major payments institution license in October 2023, Sygnum has further solidified its position in the cryptocurrency brokerage space, catering primarily to accredited investors and institutions, while adhering to regulatory standards.
