Sygnum, a cryptocurrency bank licensed in Switzerland, has become the first bank to tokenize its shares. Founded two years ago, Sygnum is currently preparing for a public offering.
The digital asset finance firm uses its own distributed ledger platform, Desygnate, to issue digital shares. Desygnate is built on the public Ethereum blockchain.
The issuance of Sygnum’s tokenized stocks comes on the eve of Switzerland’s new blockchain legislation, which will create a framework for the introduction of ledger-based securities. Sygnum said in a statement that its tokenized shares are aligned with the new law, which is set to come into force next February.
“We are excited to be the first bank in the world to tokenize our shares,” Sygnum co-founder, Mathias Imbach, said. “This is an important milestone towards fulfilling our mission of creating more direct and efficient access to ownership and value.”
Share tokenization proposes an adequately regulated model for raising capital. Desygnate is a primary market issuance platform that enables issuers to “create unique investment opportunities for investors by connecting them seamlessly in one platform.”
Parallel to Desygnate, Sygnum Bank recently launched SygnEx, a secondary market trading venue. Sygnum has stated it is “the world’s first bank with a fully integrated, institutional-grade tokenization offering.”
The digital representations of shares issued on Desygnate involve associated legal rights and obligations. Sygnum is preparing for a public offering in both Switzerland and Singapore.
Sygnum’s tokenization model also has the potential to turn clients into engaged co-owners through the implementation of a loyalty incentives program that rewards long-term shareholders with tokenized micro-shares.
The head of SIX Digital Exchange, which has partnered with Sygnum to launch its public offering, believes Sygnum has taken a very important step. “As we build institutional-grade, future-proof financial market infrastructure that leverages the benefits of distributed ledger technology,” he said, “we need credible players and pioneers to drive mainstream adoption. We are excited to partner with Sygnum on this journey and hope to facilitate a successful dual listing across Switzerland and Singapore in the future.”
According to Sygnum’s website, several companies have opted for its tokenization solution, including leading European asset manager Azimut Group, real estate investment firm ImmoZins, real estate token provider CrowdliToken, BAK Motors, and Fine Wine Capital AG.
ImmoZins founder, Dario Fazlic, said in a statement that “By tokenizing [its] real estate projects, [ImmoZins] can more efficiently manage the process of fundraising as well as post-investment administration, including distribution of returns and reporting of investor positions.”
The settlement token used by Sygnum is its own Digital CHF. When the cryptocurrency, which is pegged to the Swiss Franc (CHF), was launched in early 2020, Sygnum vowed to hold the equivalent amount of CHF as collateral for each settlement token minted in its customer accounts.