Sygnum and Matter Labs Partner to Tokenize Treasury Reserves for Transparency

Sygnum, a major digital asset banking group, has teamed up with Matter Labs, a software development company specializing in Ethereum scaling solutions, to tokenize $50 million of treasury reserves. This strategic move represents the first step in Matter Labs’ long-term strategy to transition its reserves on-chain with trusted institutional custodians.

The collaboration involves Sygnum’s investment of $50 million into Fidelity’s Institutional Liquidity Fund (ILF) on behalf of Matter Labs. Through the issuance of security tokens, Sygnum provides on-chain representations of units from Fidelity’s $6.9 billion ILF, ensuring secure and transparent “Proof-of-Reserves” for Matter Labs’ treasury.

Utilizing the zkSync Layer 2 blockchain, curated by Matter Labs, enhances security and transparency while laying the groundwork for a fully-tokenized ecosystem. This move aligns with the growing trend of tokenizing real-world assets (RWA), which saw a 74% increase to $2.5 billion in 2023.

Jürg Rimle, Country Head Switzerland at Fidelity International, lauds the partnership, emphasizing its role in bridging the gap between the digital asset economy and traditional finance. Sygnum’s Head of Tokenization, Fatmire Bekiri, underscores the importance of leveraging blockchain and traditional finance expertise to connect the crypto and TradFi sectors.

The tokenization process not only enhances transparency but also accelerates transaction settlement speed and reduces administrative burdens. As global institutions like Citi, JPMorgan, and Franklin Templeton explore tokenization technology, the collaboration between Sygnum and Matter Labs sets a precedent for future financial innovations.

Sygnum’s expertise in tokenizing traditional assets, coupled with Matter Labs’ commitment to blockchain scalability, positions the partnership as a catalyst for reshaping financial markets. Marco Cora, Matter Labs’ SVP of Business and Operations, emphasizes the institutional-grade security and transparency offered by zkSync, signaling a new era of financial infrastructure.

Sygnum’s role as a pioneer in tokenization is further exemplified by its previous initiatives, including the tokenization of its own assets in 2020. With subsidiaries like Sygnum Singapore obtaining Major Payment Institution licenses, the bank continues to expand its offerings in the crypto brokerage space.

The collaboration between Sygnum and Matter Labs highlights the transformative potential of blockchain technology in enhancing financial transparency and efficiency. As the tokenization of real-world assets gains momentum, stakeholders across the financial landscape stand to benefit from increased accessibility and liquidity.