The Institutional Liquidity Fund (ILF) of Fidelity International ("Fidelity"), valued at USD 6.9 billion[i], is represented by the Sygnum-issued security tokens on the blockchain, creating a safe and transparent "Proof-of-Reserves."

Software development, engineering, and cryptography firm Matter Labs is dedicated to improving zk-rollup technology, including zkSync, and developing scalability solutions for Ethereum. The second-largest cryptocurrency, Ethereum, has a layer 2 blockchain technology called zkSync that is intended to increase its performance. Matter Labs' long-term plan to move its treasury reserves on-chain with institutional custodians like Sygnum begins with this investment.This is the first initiative to use traditional securities in conjunction with Sygnum's multi-chain tokenization method. By tokenizing the investment in Fidelity's money market fund, Sygnum creates the groundwork for a completely tokenized ecosystem and fortifies the ties between Crypto-TradFi.

 

Expressing his views, Jürg Rimle, Country Head Switzerland at Fidelity International, welcomes the partnership with Sygnum Bank. He emphasizes that this partnership broadens access for professional and institutional investors while reinforcing the trusted connection between the emerging digital asset economy and traditional finance.

"Working with Fidelity and utilizing zkSync, Sygnum leverages both the power of the blockchain and the experience of a global Tier 1 investment manager," states Fatmire Bekiri, Head of Tokenization at Sygnum. It's a perfect example of our goal to establish Future Finance on-chain by integrating Trad-Fi and Crypto."

"Moving USD 50 million of our treasury reserves onto the zkSync blockchain showcases its institutional-grade security as well as our commitment to transparency," says Marco Cora, SVP of Business and Operations at Matter Labs. We are excited to work with Sygnum to make a portion of the Fidelity money market fund available to investors on the zkSync blockchain."

The strategic decision by Matter Labs to place its Treasury Reserves on-chain is a part of the expanding Real World Assets (RWA) tokenization trend, which saw a 74% growth to USD 2.5 billion in 2023[ii]. The financial markets are seeing unprecedented levels of openness, efficiency, and innovation in product creation due to their improved liquidity and accessibility, combined with the growing allure of conventional yield-bearing products.