Sygnum becomes the first-ever bank to roll out Tezos staking

By: Jinia Shawdagor
Jinia Shawdagor
Jinia is a cryptocurrency and blockchain enthusiast based in Sweden. She loves everything positive, travelling, and extracting joy and… read more.
on Nov 7, 2020
  • Sygnum’s users will get secure access to XTZ custody, trading, credit, and staking services.
  • Staking XTZ will see the bank’s clients earn rewards of up to 5% annually.
  • Reportedly, the bank will use individually segregated wallets to store user funds.

Sygnum has become the first regulated bank to launch Tezos (XTZ) staking. The bank unveiled this news via an official announcement on November 6, noting that this move means that it will see it support secure custody, trading, credit, and staking services for the coin. Reportedly, this development means Sygnum users can now deposit and stake XTZ through a regulated bank, allowing them to participate in the Tezos network while earning staking rewards of up to 5% annually.

According to the announcement, the bank’s clients can exit staking positions at any given time, seeing as there isn’t a minimum withdrawal period. Also, the customers will be in a position to access transaction and independently-confirmed tax reports, which will allegedly be available upon request through e-banking. The bank added that it would conduct due diligence on all Tezos validators (bakers) to help ensure their dependability before the tokens are availed on the Sygnum platform.

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By supporting Tezos staking, Sygnum has further strengthened its multi-custody platform, which now includes the Taurus project. The bank also works with Securosys, a Swiss HSM provider, in a deal that involves holding its DCHF and asset tokens. Reportedly, Sygnum has achieved these milestones through its open banking API management layer, which allows it to provide a continuously expanding array of services to banks and other financial institutions.

Reasons for offering Tezos staking services

Explaining why it decided to introduce Tezos staking services, Sygnum noted that Tezos is a robust open-source blockchain technology, which underpins smart contract functionality. The bank added that the network supports the development of decentralised applications (dApps). On top of this, the coin’s Liquid Proof-of-Stake (LPoS) consensus mechanism lets users delegate their coins to a validator and earn staking rewards. In so doing, the users help bolster the security and stability of the network.

Per Sygnum, Tezos’ LPoS consensus mechanism also allows the network to regularly adapt and adopt new features natively and automatically. As such, the network avoids hard forks and disruptions. Sygnum went on to conclude that the above perks alongside the network’s institutional-grade, secure smart contracts, a strong team of developers, and stakeholders make the network a perfect solution for valuable applications.

Commenting on this bullish development, Martin Burgherr, Sygnum Bank’s Chief Clients Officer said,

“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,”

Multiple buying options

Per David Fuchs, Tezos Foundation’s head of enterprise adoption EMEA, Sygnum’s decision to support Tezos staking validates the security and longevity of the Tezos network. He added that this move is another significant step on the path leading to institutional and enterprise adoption. Reportedly, the staking service will allow Sygnum’s clients to use their fiat deposits to buy, hold, and trade XTZ. These include CHF, EUR, SGD, and USD. On top of this, the users will enjoy high security, seeing as the bank will hold each client’s funds in individually segregated wallets to avoid counterparty risks.

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