Sygnum, a Swiss-based global digital asset banking group, has announced its plans to invest $50 million in the Fidelity Institutional Liquidity Fund on behalf of its client, Matter Labs. As part of their long-term strategy, Matter Labs aims to move all of its treasury reserves on-chain with institutional custodians, and the initial step will involve tokenizing the funds onto the Ethereum-based zkSync layer-2 blockchain, which is curated by Matter Labs.
The tokenized funds will represent a portion of Matter Labs’ holdings in the Fidelity Institutional Liquidity Fund, an open-ended umbrella for money-market funds domiciled in Ireland, with a total value of $6.3 billion. This move will provide transparency for Matter Labs’ proof of reserves, according to Marco Cora, the Senior Vice President of Business and Operations at Matter Labs. He stated, “Moving USD 50m of our treasury reserves onto the zkSync blockchain showcases its institutional-grade security as well as our commitment to transparency.”
This marks the first time that Sygnum has tokenized traditional securities. Mathias Imbach, the Co-founder and Group CEO of Sygnum, made the announcement at the Digital Asset Summit 2024 in London, stating, “We are excited to be part of Matter Labs’ long-term strategy and to support their move towards on-chain treasury reserves. The zkSync blockchain provides the scalability needed for such endeavors.”
The zkSync blockchain was established in 2018 with the aim of providing scalability to Ethereum DApps. Its public mainnet was launched in April 2023 after receiving $200 million in Series C funding in November 2022. According to L2BEAT, it reached a peak total value locked (TVL) of $870 million on March 10 and had a TVL of $715 million on March 19.
Sygnum has been a pioneer in tokenization, becoming the first bank to tokenize its own assets in 2020. Since then, it has offered its clients access to cryptocurrency staking, starting with Internet Computer and Tezos in the same year, followed by Ether in the subsequent year, and Cardano in 2022.
In October 2023, the Sygnum Singapore subsidiary obtained a Major Payment Institution license, enabling it to provide crypto brokerage services to accredited investors and institutions. However, it does not serve clients from the United States.
As the digital asset industry continues to evolve, tokenizing music royalties as NFTs could potentially revolutionize the music industry and benefit artists, similar to the impact that Taylor Swift has had in the music industry.