Sygnum issues $50 million of Matter Labs' reserves as Fidelity ILF security tokens on zkSync

Matter Labs has collaborated with the digital asset bank Sygnum to tokenize $50 million of its treasury reserves onto the zkSync Layer 2 blockchain. zkSync is a Layer 2 blockchain protocol designed to scale Ethereum ETH -7.47% dapps.

The tokenization of $50 million worth of Matter Labs' treasury reserves will take the form of security tokens issued by Sygnum. These tokens will serve as on-chain representations of units from Fidelity International's Institutional Liquidity Fund (ILF), and act as secure and transparent "proof-of-reserves" for Matter Labs' treasury reserves, according to a Tuesday press release.

"Working with Fidelity and utilizing zkSync, Sygnum leverages both the power of the blockchain and the experience of a global Tier 1 investment manager. It's a prime illustration of our mission to connect crypto and TradFi and build future finance on-chain," said Sygnum Head of Tokenization Fatmire Bekiri.

The increasing trend towards tokenizing real-world assets

The move by Matter Labs, the core developer of zkSync, signifies the first step in its long-term strategy to transition its treasury reserves on-chain, utilizing institutional custodians, such as a global digital asset banking group like Sygnum.

"Moving $50 million of our treasury reserves onto the zkSync blockchain showcases its institutional-grade security as well as our commitment to transparency. We're eager to collaborate with Sygnum to bring part of the Fidelity money market fund on the zkSync blockchain for investors," Matter Labs SVP of Business and Operations Marco Cora said.

Matter Labs' strategic move bringing its treasury reserves on-chain is part of the growing real world assets (RWA) tokenization trend which in 2023 increased 74% to $2.5 billion, according to a study.