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In a groundbreaking move, Swiss digital asset bank Sygnum is partnering with European SaaS lender float to tokenize part of its portfolio. This tokenization offering allows float to borrow against recurring revenues without relying on venture capital. The UK hedge fund Fasanara Capital is the senior lender, while the tokens represent the junior, higher risk, higher return tranche. The tokens have an 18-month maturity, pay 14% per annum, and are governed by Switzerland’s DLT laws.
One of the key benefits of tokenization in this case is enhanced liquidity. Typically, investments like this would be relatively illiquid, but Sygnum provides a secondary market called SygnEx. This secondary market, along with the fractionalization of the tokens, broadens the investor base and increases liquidity. Tokenized debt markets are expected to become mainstream, with an estimated asset class value of USD 3.5 trillion by 2030.
The token will be issued on the Polygon blockchain. Tokenization is seen as particularly suitable for less efficient and less liquid asset classes, as it can lead to greater efficiencies and smaller token sizes. Private credit and private equity are examples of asset classes that fit this definition. On the other hand, public equity markets, which are already highly liquid, may not benefit as much from tokenization. According to a forecast by BCG, there will be $16.1 trillion in tokenized assets by 2030.