South African investment firm Sygnia Asset Management has announced plans to launch a cryptocurrency exchange later this year. The platform, to be named SygniaCoin, is expected to go live before the end of September.
“We aim to launch SygniaCoin, a cryptocurrency exchange, in the third quarter of 2018,” said Magda Wierzycka, CEO of Sygnia.
“The cryptocurrency market is evolving rapidly both internationally and locally, attracting flows from domestic and overseas investors,” she added.
The move will position Sygnia — which manages $14.5 billion in assets — among the major investment firms integrating cryptocurrencies into their offerings. Wierzycka said the exchange will provide investors with a “secure trading and execution platform backed by international infrastructure, professionally designed custody, and integration with standard savings products.”
BitLicense Framework
SygniaCoin will adopt the New York State Department of Financial Services’ BitLicense framework as a model for its operations and policies, Wierzycka said. The BitLicense is a regulatory standard designed for virtual currency exchanges operating in New York and is widely regarded as one of the most comprehensive frameworks available.
“To ensure the highest levels of integrity and security for clients, we are basing our policies, protocols and processes on existing regulatory frameworks applicable to cryptocurrency exchanges registered in New York State, USA,” Wierzycka said.
Under Sygnia’s plan, investors will be able to add cryptocurrencies to their investment portfolios and trade them on the platform. Sygnia also intends to offer a fund that will invest in a range of cryptocurrencies on behalf of clients.
Significant Local Interest
Interest in cryptocurrencies is strong in South Africa, with many residents considering investments despite market volatility. The country has not yet established a comprehensive legal framework specific to cryptocurrency trading.
The South African Revenue Service has stated that proceeds from cryptocurrency trading form part of taxable income. For tax purposes, the revenue service treats cryptocurrencies as “assets of an intangible nature” rather than as legal tender.
Institutional involvement in the cryptocurrency market has been growing gradually in response to client demand. For example, Monex Group of Japan acquired the troubled exchange Coincheck as a strategic entry into the sector, and Goldman Sachs has announced plans to set up a cryptocurrency trading desk to act as a clearing agent.
Major banks in Japan are also exploring digital currency initiatives. Mitsubishi UFJ Financial Group (MUFG) has been testing a proprietary MUFG coin for internal transactions, with a larger pilot involving about 100,000 users planned for the following year.
Sygnia’s entry into the cryptocurrency space reflects an expanding trend among established financial institutions to provide regulated, secure access to digital asset markets for retail and institutional investors.