Crypto bank Sygnum is mulling a public offering that may include both Switzerland and Singapore stock exchanges. The first step toward an IPO has been taken.
Swiss crypto bank Sygnum has tokenized its own shares, claiming a world-first for a bank. It means that digital representations of its shares have been created and are immutably accounted for on a distributed ledger.
This successful tokenization lays the foundation for Sygnum to eventually go public. For its future public offering, Sygnum is currently exploring several strategies in its home markets of Switzerland and Singapore, including a potential dual listing with ecosystem partner SIX Digital Exchange (SDX) in Zurich, and also with the Singapore-based digital exchange partnership between SDX and SBI Digital Asset Holdings.
Alternative Way to Raise Capital
Sygnum aims to widen its capital base to enable the company to boost its business. With tokenization, Sygnum’s share registry will continuously and automatically update itself whenever capital increases or share transfers occur, allowing the bank to manage primary and secondary market transactions in a fully digital manner.
This eliminates the need for buyers to inform Sygnum to manually update its shareholder registry, and does away with lengthy cash settlement processes, thus minimizing counterparty risk. The strategic milestone was achieved using Sygnum’s tokenization platform, Desygnate.
The platform provides corporates a fully regulated, highly efficient and potentially more inclusive model to raise capital as compared to traditional options, such as IPOs. Desygnate has been designed to be fully compatible with the new Swiss DLT law which enters into force from February 2021.
Incentive Program for Shareholders
Sygnum will leverage the smart contract capabilities of its tokenized shares to enable the full potential of stakeholder relationships. For example, Sygnum could reward long-term shareholders and clients with tokenized micro-shares via a micro-shares program, encouraging closer engagement and incentivizing them to refer new investors and clients to Sygnum.
These shares can be viewed in a consolidated wealth report in each shareholder’s segregated bank account, alongside cash deposits, cryptocurrencies, other asset tokens as well as Sygnum's settlement token.
Another firm to plan the issuance of tokenized shares is Bitcoin Suisse. The company in August had announced a security token offering for early 2021. Bitcoin Suisse has also applied for a bank license, but doesn't need more cash following a successful round of financing.
