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Swiss-based global digital asset banking group Sygnum will invest $50 million in the Fidelity Institutional Liquidity Fund on behalf of its client Matter Labs. Those funds will be tokenized as the first step in Matter Labs’ long-term strategy to move all of its treasury reserves on-chain with institutional custodians.
The funds will be tokenized onto the Ethereum-based zkSync layer-2 blockchain, which Matter Labs curates. The tokenized funds will represent part of Matter Labs’ holdings in the Fidelity Institutional Liquidity Fund, an open-ended $6.3-billion umbrella for money-market funds that is domiciled in Ireland.
The funds are intended to provide transparency for Matter Labs’ proof of reserves. Matter Labs senior vice president of business and operations Marco Cora <a href="https://www.prnewswire.com/apac/news-releases/sygnum-tokenises-matter-labs-treasury-reserves-in-usd-6-9bn-fidelity-mmf-302092675.html" target="_blank" rel="noopener noreferrer nofollow">said</a> in a statement, "Moving USD 50m of our treasury reserves onto the zkSync blockchain showcases its institutional-grade security as well as our commitment to transparency.”
<figure><img src="https://s3.cointelegraph.com/uploads/2024-03/19dbb51a-eeb7-4ea0-91c0-0a59c770974f.png" alt="" title="">
 <figcaption style="text-align: center;">Source: @sygnumofficial on X
 </figcaption>
</figure>
This is the first time Sygnum has tokenized traditional securities. Sygnum co-founder and group CEO Mathias Imbach commented on the deal at Digital Asset Summit 2024, currently underway in London. He said:
<blockquote>
 “We believe in permissionless public blockchains, but at the same time, we believe in compliance and the value of compliance, regulation, etc. So we see a role in helping the different ecosystem players to work together.”
</blockquote>
The zkSync blockchain was founded in 2018 to provide scalability to Ethereum DApps. Its public mainnet <a href="https://cointelegraph.com/news/deposits-to-zksync-surpass-110m-as-its-defi-ecosystem-explodes" rel="noopener noreferrer nofollow">was launched in April 2023</a> after <a href="https://cointelegraph.com/news/zksync-developer-matter-labs-raises-200m-commits-to-open-sourcing-platform" rel="noopener noreferrer nofollow">receiving $200 million in Series C funding</a> in November 2022. It <a href="https://cointelegraph.com/news/deposits-to-zksync-surpass-110m-as-its-defi-ecosystem-explodes" rel="noopener noreferrer nofollow">reached</a> a high of $870 million in total value locked (TVL) on March 10 and had $715 million TVL on March 19, according to L2BEAT.
Related: <a href="https://cointelegraph.com/news/matter-labs-founder-proposes-ethereum-supreme-court-on-chain-disputes" rel="noopener noreferrer nofollow">Matter Labs co-founder proposes ‘Ethereum Supreme Court’ for on-chain disputes</a>
Sygnum <a href="https://cointelegraph.com/news/swiss-crypto-bank-sygnum-tokenizes-shares-and-prepares-for-public-offering" rel="noopener noreferrer nofollow">claimed to be the first</a> bank to tokenize its own assets in 2020. It began offering its clients access to cryptocurrency staking the same year, beginning with Internet Computer and Tezos, <a href="https://cointelegraph.com/news/sygnum-becomes-first-bank-in-the-world-to-offer-eth2-staking" rel="noopener noreferrer nofollow">adding Ether the following year</a> and <a href="https://cointelegraph.com/news/swiss-sygnum-bank-expands-crypto-staking-with-cardano" rel="noopener noreferrer nofollow">Cardano in 2022</a>.
The Sygnum Singapore subsidiary of the bank received a Major Payment Institution license in October 2023, allowing it to offer crypto brokerage services to accredited investors and institutions. Sygnum <a href="https://cointelegraph.com/news/sygnum-sees-increased-crypto-firm-inquiries-after-us-banking-giants-collapse" rel="noopener noreferrer nofollow">does not accept United States clients</a>.
Magazine: <a href="https://cointelegraph.com/magazine/tokenizing-music-royalties-nfts-taylor-swift-3lau-nas-the-weeknd/" rel="noopener noreferrer nofollow">Tokenizing music royalties as NFTs could help the next Taylor Swift</a>

Sygnum bank to tokenize $50M of Matter Labs’ reserves for transparency

Cointelegraph

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