Swiss regulated cryptocurrency bank Sygnum has tokenised its shares and plans to be the first financial institution to conduct an initial public offering (IPO) based on DLT technology.
Sygnum will use its Desygnate platform to issue security tokens, which is compatible with the Swiss blockchain law that will come into force in February 2021.
The platform will enable issuers to carry out all necessary regulatory procedures related to the subsequent listing of the shares.
Sygnum’s share register will be continuously and automatically updated with each transaction, allowing the bank to manage transactions on the primary and secondary markets in a completely digital way. This eliminates lengthy settlement processes, thereby minimising counterparty risk. The platform will also help bypass the requirement for a written form of share transfer between buyers and sellers.
Sygnum plans to leverage the smart contracting capabilities of tokenised shares in the future to realise the full potential of the investor-issuer relationship.
„Equity tokenisation provides investors with a fully regulated, highly efficient and potentially more inclusive alternative to traditional methods of raising capital,“ says the press release.
The equity issuance could precede a dual listing in Switzerland and Singapore in partnership with SIX Digital Exchange.
As a reminder, SIX Digital Exchange and SBI Digital Asset Holdings have announced the launch of a blockchain platform in Singapore for institutional clients from Europe and Asia. The platform will offer issuance, listing, trading and central depository infrastructure for cryptocurrencies and regulated security tokens.
Sygnum has previously received approval from financial regulator FINMA for initial issuance, storage, as well as secondary trading of digital securities.