The world of banking and cryptocurrencies has always opposed each other. However, over the past few years, this gap has narrowed considerably as we’ve seen multiple banking institutions getting involved with blockchain technology and in some cases cryptocurrencies as well.
Recently, Switzerland’s Sygnum Bank, a digital assets company licensed in Switzerland, has become the world’s first regulated entity to offer a staking service for popular cryptocurrency Tezos (XTZ), a blockchain protocol that allows the development of decentralized applications atop its network like Ethereum.
Sygnum is set to provide various services like custody, trading, credit, and staking services for XTZ as part of the launch.
Tezos holders are able to delegate their tokens to a validator and earn staking rewards as a result of the network’s Liquid Proof-of-Stake (LPoS) consensus mechanism. This allows participating nodes to earn rewards as a commission for helping maintain the network.
All users involved in the staking service receive up to 5 percent annually, as a result of Tezos’ staking network, and rewards paid out to validator nodes. As an effort towards “institutionalizing” the service, customers of Sygnum bank will be able to rely on the bank’s independently-confirmed tax impact assessment reports which are easily accessible via e-banking.
In addition, the bank will also inspect the select group of valuators that it offers on its platform. There is also no minimum withdrawal period and users will be able to exit their positions at any time.
Martin Burgherr, Sygnum Bank’s Chief Clients Officer, commented:
“We are strong supporters of Tezos and its unique Liquid Proof-of-Stake governance mechanism, which aligns with our Sygnum values. With XTZ staking, our clients can access a unique asset which offers staking rewards and enables them to structure their digital asset portfolios in more creative ways. Tezos is the first Proof-of-Stake (PoS) token on Sygnum Bank’s platform, where we are continually expanding our offering to provide more choice for our clients.”
Easy fiat onramp
Sygnum users also have a variety of options as an onramp as the bank accepts multiple fiat currencies including CHF, EUR, SGD, and USD, to securely buy, hold, and trade XTZ. They can also increase fiat liquidity with a loan against their XTZ.
Furthermore, the protocol is integrated with fiat balances and other leading protocol tokens, a Digital CHF token for instant settlements, and a diverse range of asset tokens – all in a single account, the release added.
The assets are also held in individually segregated wallets that are highly secure to mitigate counterparty risks. These wallets are accessible from the bank’s official internet banking platform from anywhere across the globe.
Sygnum is regulated as a bank by the Swiss Financial Market Supervisory Authority (FINMA) and offers a variety of digital asset services with a focus on the B2B market.