Tokenization Trends & Trust: Gerald Goh's Lens | Techsauce

Tokenization Trends & Trust: Gerald Goh's Lens

Sygnum, a global digital asset banking group, is positioning itself as a trusted partner for institutional investors, corporations, and high-net-worth individuals seeking to navigate the digital asset landscape.

"Across these four markets– Switzerland, Singapore, Luxembourg and Abu Dhabi, we have the necessary regulatory licenses to conduct our business activities," explains Gerald Goh, Co-Founder and CEO Singapore of Sygnum. "Our business activities are very broad, but in essence, what they do is offer a full range of regulated, digital-asset focused banking and associated financial services."

Goh is optimistic about the future, stating, "We believe that digital assets are here to stay and will eventually become a mainstream asset class. The future of digital assets is bright."

Note: This interview has been edited for clarity and readability.

What role does Sygnum play in the global and Southeast Asian digital asset ecosystem, and what services does it provide?

Sygnum offers a range of services, including custody, asset management, and tokenization. We also collaborate with other regulated banks and financial institutions to white-label their crypto offerings. Currently, we have more than 1,800 clients with upwards of CHF 5 billion assets under management. We focus on institutional investors, accredited investors, corporates, and  regulated financial institutions.

The majority of the assets entrusted to us are, of course, digital assets, which include cryptocurrencies, and also real-world asset tokens that represent fractional ownership in equity stakes in companies, private companies, or tokenized units of artwork.

Meanwhile, in Singapore, while we don't have a banking license, we are licensed for a range of other activities, including trading, custody, asset management, and corporate finance advisory. While the nature of our business offerings may differ slightly from what we do in Switzerland, the core of what we provide—a regulated platform for clients to access the digital asset space—remains the same.

Can you share your perspective on the current global trend of cryptocurrency and tokenization adoption?

The US approval of the Bitcoin spot ETF has significantly changed the crypto space. Before the approval, there was skepticism about the acceptance of Bitcoin and other cryptocurrencies by US regulators.  Larry Fink from BlackRock stated that their Bitcoin ETF is the fastest growing ETF product in the history of ETFs. The approval of the spot ETFs was a positive development, as it paved the way for the institutionalization of the asset class and attracted capital allocators who might have been sitting on the sidelines. 

Bitcoin's price has responded positively to the increase in market demand and activity, particularly from institutional investors and corporate clients. Sygnum has seen trading volumes at all-time highs in the first quarter of this year, particularly in March. 

Building trust is key in the world of digital assets. How does Sygnum earn the trust of clients and regulators?

Digital assets are here to stay, and businesses must work closely with regulators and stakeholders to ensure the man on the street can participate. Sygnum has always been very clear about the need to engage regulators proactively, to maintain  open and transparent communication and dialogue.

It takes time to establish regulatory frameworks and enact laws. So, getting the licenses, maintaining the licenses, and having good relationships with the regulators are key factors in building and maintaining trust.

Digital assets are here to stay, and businesses must work closely with regulators and stakeholders to ensure the man on the street can participate.

FTX’s collapse demonstrated the negative outcomes of the absence of regulatory supervision and oversight, which could lead to significant risks of fraud and misconduct. I think the market has now come to appreciate the need for financial institutions to be regulated.

What are the potential benefits and challenges of tokenization for businesses and investors?

In theory, tokenization can bring benefits to businesses and investors, such as efficient capital raising, democratizing access to traditionally hard-to-access asset classes, and providing  secondary liquidity through digital asset exchanges. However, many of these benefits have not yet been fully realized.

We believe that digital assets are here to stay and will eventually become a mainstream asset class. The future of digital assets is bright, with more institutional allocators, corporations, and sovereign funds investing in these assets. To achieve mainstream acceptance and adoption, service providers and financial institutions must follow the law and work closely with regulators and governments to ensure proper licensing and regulations for every activity.

What do you think the future holds for tokenization ? 

Despite the challenges many tokenization projects face, it does have the potential to transform the financial industry by making the trading of securities more efficient. By converting stocks, bonds, treasury and assets like art and fine wine into digital tokens, tokenization opens more opportunities to a wider base of investors. It also reduces the need for intermediaries and simplifies the sale process, so transactions can be faster and cheaper.

The growth of tokenization will depend heavily on the regulatory environment. Clear legislation governing the rights of both issuers and investors will be necessary for stronger mainstream adoption and, eventually, unlocking secondary liquidity.

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