Leading the Charge in Institutional Adoption of Digital Assets With Sygnum

1/ Mathias Imbach (@Mat_CH_IND), Group CEO & Co-founder of Sygnum (@sygnumofficial), sat down with Alex Wenham (@APWenham), Digital Assets Product & Strategy Lead at @Bloomberg, for a fireside chat at REDeFiNE TOMORROW 2024, SCB 10X's 5th annual global DeFi & Web3 virtual summit.
2/ Sygnum is a digital asset banking group focused on institutional needs and bringing trust to the ecosystem. Launched in 2017, Sygnum is a licensed bank in Switzerland and fully regulated in Luxembourg, Abu Dhabi, and Singapore.
3/ Sygnum follows an all-in-one account approach towards digital assets, ranging from custody, stablecoins, staking, trading, asset management, and tokenization. They strategically decided not to enter the US market due to regulatory uncertainty.
4/ Sygnum's dual headquartership in Switzerland and Singapore allows them to operate in strong financial hubs with clear regulatory frameworks. They are considering further expansion into the EU with MiCAR and exploring opportunities in Hong Kong.
5/ Infrastructure alignment between traditional finance and crypto remains a challenge. Sygnum is bridging this gap by providing sub-custody, trading, and bank-to-bank services to over 20 banks in Switzerland, with a third of the Swiss population able to trade crypto through a Sygnum-integrated app.
6/ Sygnum's modular white-label solution allows banks to integrate custody, trading, and crypto AML services without clients knowing Sygnum is in the background. This ease of use and integration with existing portfolios is crucial for further adoption.
7/ After the FTX collapse, institutions are carefully analyzing counterparty risks. Sygnum's off-balance sheet custody, as per the Swiss Banking Act, ensures clients' assets are protected even in the event of Sygnum's bankruptcy.
8/ Sygnum's Trade Collateral Management product allows clients to deposit funds with Sygnum while maintaining a virtual margin to trade on less regulated exchanges. This manages counterparty risk while providing access to liquidity and the potential for yield on collateral.
9/ Sygnum advises clients to think of crypto as an asset universe with different components, such as venture (blockchain infrastructure), hedge fund strategies (alpha), smart beta exposure (indices), yield strategies, and pure beta (long investments in ETFs or directly holding assets).
10/ Sygnum serves a growing niche of crypto-native treasuries and DAOs. Due diligence for these entities is complex, and Sygnum's role is to bridge the gap between traditional finance and crypto while upholding regulatory frameworks.
11/ Sygnum's unique selling proposition is the intersection of blockchain technology, financial products, and fully regulated services. They focus on educating crypto-native clients about the benefits of traditional finance while offering access to both worlds in one portfolio.
12/ Tokenization adoption has been slower than expected, but there has been recent acceleration driven by the tokenization of real-world assets like money market funds. Blackrock's partnership with Circle to tokenize a money market fund is a notable example.
13/ While tokenizing art, like a Picasso painting, allows for fractional ownership and liquidity, it is still in the early stages and not yet happening at scale. Growth in this area is expected to be slower due to the limited number of entities legally able to deal with securities.
14/ Sygnum's strength lies in bridging the gap between blockchain technology and fully regulated financial services. They are well-positioned to navigate the complex landscape of crypto adoption by institutional players.
15/ As regulatory clarity improves and infrastructure aligns, Sygnum expects continued growth in institutional adoption of digital assets. Their focus on trust, compliance, and innovation positions them as a key player in the future of finance.