Sygnum Sees Strong Crypto Demand Boosting New Singapore Brokerage

Suvashree Ghosh, Bloomberg News

(Bloomberg) -- Sygnum AG is seeing strong demand for crypto transactions from fund houses, family offices and institutions, which is expected to boost revenues from a new brokerage business in Singapore.

Sygnum, which runs a digital-asset bank in Switzerland and offers asset management in Singapore, recently got in-principle approval from the Monetary Authority of Singapore for a license that allows it to offer digital token brokerage services. It’s seeking to ride the global rise in demand from corporates and institutions looking for regulated crypto trading venues, said Gerald Goh, co-founder and CEO of Sygnum Singapore.

“A lot of our demand right now is coming from web3 or crypto fund managers who as part of their regulated fund management activities, have a business reason to be buying or selling digital assets, including cryptocurrencies,” Goh said in an interview.

Banking options for crypto firms have narrowed significantly after the collapse of Silvergate Capital and Signature Bank in the US in March as traditional lenders turned more cautious on onboarding customers linked to the volatile digital asset industry. Some smaller lenders have emerged, though their settlement services take long.

Sygnum’s Swiss bank saw a spike in interest from prospective clients after the US bank failures, Goh said. Client assets, which includes deposits of digital tokens as well as fiat money, rose to an “all-time high” of more than 3 billion Swiss francs ($3.3 billion) at the end of May, he said.

“After the US banking crisis, demand for regulated crypto financial institutions have gone up and the Singapore license will help us to offer the services to such clients,” Goh said.

Sygnum plans to offer crypto custody and broker-dealer services in Singapore, according to Goh. The brokerage will matchmake quotes from its clients by aggregating bid-offer from market makers via the bank in Switzerland, he said.

The final license in Singapore will allow Sygnum customers to trade, send and receive crypto and fiat money, but will not cover on and off ramping services, Goh said, referring to the ability to convert fiat money into cryptocurrencies and vice versa. Sygnum Bank in Switzerland will be the counterparty of the Singapore entity’s brokerage business, he said.

--With assistance from Kevin Dharmawan.