Sygnum Bank announces the launch of its regulated end-to-end tokenization solution comprised of Desygnate, a primary market issuance platform, and SygnEx, a secondary market trading venue. With this, Sygnum becomes the world’s first bank with a fully integrated, institutional-grade tokenization offering. This enables issuers to create unique investment opportunities for investors by connecting them seamlessly in one platform, and represents a landmark in the convergence of global public and private markets.
- Fast entry-point for issuers to raise capital, build liquidity, and efficiently transfer ownership and manage corporate actions
- Unlocks the multi-trillion CHF global market of illiquid and currently hard-to-access assets
- Investors can access four high-growth investment verticals: Venture Capital, Mid Cap, Real Estate, and Art & Collectibles
- Trading for listed assets available on SygnEx, a regulated digital asset trading facility
- Instant 24/7 settlement and reduced counterparty risks via Sygnum’s Swiss Franc stablecoin, the Digital CHF (DCHF)
- Distributed Ledger Technology works in the background to deliver new levels of customer experience, efficiency, and transparency
- Strong and diverse cohort of issuers, including Azimut Group, SBI, ImmoZins, CROWDLITOKEN, BAK Motors, and Fine Wine Capital AG
Access unique investment opportunities
Putting tokens on the blockchain was a relatively straight-forward technical challenge that was solved some time ago. However, this was only the “tip of the iceberg” in terms of providing a viable, regulatory compliant alternative to issuing and managing traditional securities. It is Sygnum Bank’s embedding of an end-to-end blockchain-based tokenization solution into existing legal frameworks and operational banking processes and systems that has truly unleashed the potential of tokenized assets for both issuers and investors.
This is a milestone in the development of the digital asset market, which now enables issuers to tokenize new or existing financial and real assets. For example, Switzerland’s estimated 600,000[1] SMEs, and the 45,000[2] new companies founded each year, can now attract a broader network of investors and raise capital by issuing security tokens, which can be securely traded on SygnEx. This solves many of the challenges startups and SMEs face when raising capital in traditional capital markets: high costs, extensive listing requirements, and resource-intensive processes. Similar benefits apply for the CHF 60 billion[3] annual global Art and Collectibles market, which can now make its unique assets more widely accessible, affordable by fractional ownership, and easily tradeable.
Investors can now profit from asset classes previously seen as hard-to-access in a direct and fractional manner, including Venture Capital, Mid Cap, Real Estate, and Art & Collectibles, all of which are now made investible through tokenization, a blockchain-powered alternative to traditional asset securitisation. Investors will benefit from access to all such opportunities on Desygnate, with the peace of mind that all assets and issuers have been vetted by Sygnum, and investors are onboarded by a fully regulated digital asset bank.
“Empowering both issuers and investors to create and have access to unique, often frontier, investment opportunities has been a core part of Sygnum’s mission since day one. With Desygnate and SygnEx, we bring a blockchain-powered business solution to market which opens up a world of new opportunities for capital market participants to do business”,Mathias Imbach, Sygnum’s Group CEO Designate.
Strong and diverse cohort of issuers
Interest has been strong, with many issuers joining those who tokenized their assets earlier this year. These include:
Azimut Group, one of Europe’s leading independent Asset Management companies, who is working on tokenizing investment products in the Mid Cap vertical. “We have strong belief in the power of tokenization to transform capital markets – this will expand the suite of potential investment solutions for individual and institutional investors alike,” says Giorgio Medda, Co-CEO.
ImmoZins, a leading real estate investment firm who is tokenizing debt products in the Real Estate vertical. Dario Fazlic, Founder, believes that “By tokenizing our real estate projects, we can more efficiently manage the process of fundraising as well as post-investment administration, including distribution of returns and reporting of investor positions.”
CROWDLITOKEN,a leading product provider for digital assets in real estate, will be the first to join Desygnate as a 3rd party provider to use the platform for custodial services and to make their token tradeable on the SygnEx digital asset trading facility. “Until now, there was no regulated end-to-end solution for tokenization – by leveraging Sygnum’s custody and trading platform for asset tokens we can fully realise the advantages of our real estate tokens,” explains Domenic Kurt, CEO.
BAK Motors, an electric vehicle innovator partnering with a leading Formula 1 group, is expanding its investor network and raising capital in the Venture Capital vertical. Tibor Bak, CEO and President, says “We use the latest cutting-edge technology not only in our electric vehicle design and with our product partner, using technology derived from that used in motorsport including Formula 1, but also when expanding our investor network and raising capital. We look forward to driving growth together with Sygnum’s Desygnate tokenization platform.”.”
Fine Wine Capital AG,a Swiss-based fine wine investment company, who will be the first to join the world of tokenized wines assets on the Desygnate Platform.
At the same time, Sygnum is working with SBI Ven Capital Pte Ltd, a subsidiary of Japanese financial conglomerate SBI Group, to explore tokenization of the fund structure for the recently announced Digital Asset Opportunity Fund, in order to increase accessibility for investors and offer them the potential for greater liquidity post-investment.
Tokenization brings other benefits for investors and securities issuers
With a settlement token such as Sygnum’s Digital CHF, payment and settlement of asset token transactions can be done instantly and directly. Corporate actions and shareholder registry updates will be automatically executed, and the ability to issue micro-shares on the blockchain can be leveraged in customer interactions – for example, by designing a loyalty incentive that transforms customers and business partners into engaged co-owners.
Additional information
Why is Sygnum launching Desygnate now?
Significant amounts of fiscal stimulus injected into economies globally this year has driven up asset prices and is fuelling concerns over inflationary pressure. Investors are therefore searching for alternative investments that can provide returns on their capital. In this environment, tokenization will help to fill this need and broaden the investment universe available to investors, allowing them to build more holistic, diversified, and resilient portfolios.
How does tokenizing assets create more liquidity and higher market values?
Tokenization now also allows high-value assets as diverse as works of art, diamonds and vintage cars to be represented as security tokens on the blockchain, opening up new possibilities such as fractionalized ownership and simplified transfer/trading, thanks to standardization and DLT-powered processes. Because these equally valuable and identical asset “fractions” can finally be easily transferred and traded, the resulting liquidity can increase the overall market value of the asset.
What is SygnEx, Sygnum’s secondary market?
SygnEx is a blockchain-powered, regulated secondary market for asset tokens. Digital asset trading on SygnEx not only offers investors access to unique and untapped investment opportunities after their initial issuance, but also eliminates any investment lock-ins, since positions can be liquidated and portfolios reallocated at any point in time. Investors further benefit from instant settlement, the ability to move between fiat, digital CHF (DCHF) and asset token positions in real-time, as well as the security of an integrated bank-grade custody solution – all in one regulated platform. Listings are underway, with trading set to commence in early 2021.
Is Sygnum’s tokenization solution compliant with the upcoming Swiss DLT law?
Sygnum’s tokenization solution is based on legally robust intermediated securities which can only be offered by regulated financial institutions. Our solution has been designed to be fully compliant with the upcoming Swiss DLT law, and enables our clients to already benefit from its favourable legal developments and the sound legal foundations of these new DLT-based securities.
- [1] Swiss Federation SME portal
- [2] Institut für Jungunternehmen
- [3] Artbasel.com/about/initiatives/the-art-market
About Sygnum
Sygnum is the world’s first digital asset bank, and a digital asset specialist with global reach. With Sygnum Bank AG’s Swiss banking licence, as well as Sygnum Pte Ltd’s capital markets services (CMS) licence in Singapore, Sygnum empowers institutional and private qualified investors, corporates, banks and other financial institutions to invest in the digital asset economy with complete trust. Sygnum operates an independently controlled, scalable and future-proof regulated banking platform. Our interdisciplinary team of banking, investment and Distributed Ledger Technology (DLT) experts is shaping the development of a trusted digital asset ecosystem. The company is founded on Swiss and Singapore heritage, and operates globally. To onboard digitally with Sygnum, please visit www.sygnum.com.
Photo by 🇨🇭 Claudio Schwarz | @purzlbaum on Unsplash
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