Licensed Swiss Bank Sygnum to Launch Custody, Trading of DeFi Tokens
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Licensed Swiss Bank Sygnum to Launch Custody, Trading of DeFi Tokens

Swiss Bank Sygnum has unveiled regulated services for a number of leading DeFi tokens.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Switzerland’s Sygnum Bank aims to facilitate professional investors to get into DeFi in a regulated manner. They’re facilitating the trading of leading decentralized finance (DeFi) tokens including Aave, Aragon, Curve, Maker, Synthetix, Uniswap, and 1inch Network.

Besides this, the bank is also expanding its token offering to the stablecoin USDC, with an aim to bridge the conventional centralized finance world with that of DeFi.

DeFi Attracts Banks While Being in Experimental Phase

DeFi is an umbrella term for a diverse list of financial applications (decentralized applications) in blockchain geared toward disrupting financial intermediaries. Despite being in the experimental phase, the system has grown to be remarkably big

Just one year ago, the Total Value Locked (TVL) in DeFi applications was approximately $1 billion, though it has now surged to a staggering $60 billion. In terms of users, DeFi has attracted more than 2 million users (unique addresses) in the last 12 months. Furthermore, the daily trading volume on decentralized exchanges (DEX) regularly exceeds $2B, showcasing the overall adoption of DeFi. 

Moreover, DeFi is poised to significantly enhance the scalability and value of DeFi applications through the ongoing Ethereum 2.0 upgrade, solving the transaction speed and costs issues DeFi has encountered due to excessive adoption. Bearing all these in mind, it certainly makes sense for a bank to want to tap into the uncharted yet promising waters of DeFi—though a lack of regulations have been a serious concern.

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Sygnum Bank Gets Into DeFi — in an Ambitious Way

Sygnum Bank announced today that it has launched the first phase of its regulated institutional-grade access to decentralized finance. This very first phase enables Sygnum customers to directly invest in the leading DeFi tokens including Aave, Aragon, Curve, Maker, Synthetix, Uniswap, and 1inch Network, and access a full suite of banking services including institutional-grade custody, transfer and trading services. 

On top of this, Sygnum also reveals its ambitious goal to bring even more DeFi products into its range of services. In later phases, the bank aims to bring a suite of DeFi yield-generating products and services across its banking, allowing institutional investors to earn passive income while enjoying the regulated environment.

In a historic move, the bank speaks about collaboration with DeFi protocols. While the reason for collaborations will certainly benefit the bank, such partnerships can greatly help DeFi receive mainstream attention and trust. The bank stated:

“In parallel, Sygnum is collaborating with leading DeFi protocols to develop an innovative range of custom DeFi solutions targeted towards institutional and private qualified clients.”

Is Sygnum a Fully Regulated Bank?

Sygnum claims to be the world’s first digital asset bank. According to the bank’s website, it aims to empower institutional and private qualified investors, corporates, banks, and other financial institutions to invest in the digital asset economy. 

Despite being in the largely unregulated field of digital assets, Sygnum holds a Swiss banking license and is supervised by the Swiss Financial Market Supervisory Authority. This means that the bank should maintain the highest standards in quality, transparency, and security.

The bank is also required to meet the standards of anti-money laundering (AML) and counter-terrorist financing (CTF). Sygnum claims that it has built its own proprietary digital asset AML tool, and has established an AML committee headed by a former Special Advisor to a financial regulator to help the bank steer in the right direction.

Starting today, DeFi has officially attracted a bank. What do you think will be next for DeFi? Do you think more banks will start considering regulated banking services for DeFi tokens? Let us know in the comments below.