Sygnum’s hashrate-backed loan accelerates green crypto mining

Sygnum’s hashrate-backed loan accelerates green crypto mining

UPDATE 20 July, 2023: Sygnum and SATO Technologies are renewing this innovative green financing solution to grow the global ecosystem of carbon-neutral crypto miners.

  • Sygnum provides cash loans to green crypto miners who pledge a pre-defined portion of their computational mining power, then sells the mined coins to repay the debt
  • SATO Technologies and CTCAP Group first to leverage flexible financing solution and boost their combined hash power by over 250 PH/s [1]
  • Addresses the financing gap for carbon-neutral crypto mining and supports the industry’s transition towards a sustainable economy

Sygnum announces the launch of its innovative green financing solution for the growing global ecosystem of carbon-neutral crypto miners. They can pledge pre-defined portions of their existing processing power – or hashrate – in return for cash loans provided by Sygnum. Crypto assets mined from the pledged hashrate is then sold by Sygnum to repay the debt.

Mining is the process in which decentralised computer networks contribute processing power to verify blocks of transactions on a Proof-of-Work (PoW) blockchain. The miner who successfully verifies a block receives a block reward in the blockchain’s native token, for example Bitcoin (BTC) on the Bitcoin network.

Critics of Proof-of-Work (PoW) blockchains believe that their inefficient energy use adversely impacts the climate. Bitcoin attracts the bulk of this criticism due to its market share and continually increasing energy footprint. In response, 58 percent[2] of Bitcoin miners globally have transitioned to renewable energy sources. The speed of this transition is made possible by miners’ ability to rapidly relocate their operations to places with cheaper, more stable and environmentally friendly energy sources. You can read more about this in the Sygnum report “Does crypto have an energy problem?” here.

Crypto miners often do not have access to traditional finance to acquire, run and maintain their energy-intensive mining rigs – costs that can run into the millions annually, even for small operations. To support the industry’s transition to renewable energy sources, Sygnum is providing hashrate-backed loans to finance the capacity expansion of miners who can demonstrate ongoing carbon neutral operations. This new green crypto financing solution aims to support green mining and accelerate the industry’s transition to a carbon-neutral economy.

comments, “Sygnum’s strategy is to provide ESG-friendly financing to green miners and support their efforts to bring innovation and sustainability to the global crypto ecosystem. By pledging a portion of their mining hashrate, carbon-neutral miners can obtain the capital they need to expand their operations, increasing the inflow of green crypto assets into the market.”

Sygnum’s Head of Credit and Lending, Benedikt Koedel

says, “Sygnum Bank’s active support for sustainable Bitcoin mining has enabled us to scale up both our operations and hashrate via new mining rigs, and at the same time take another step towards making the crypto industry greener and more efficient.”

Romain Nouzareth, CEO and Chairman of SATO Technologies Corp

adds, “With Sygnum’s green mining loan, we were able to scale up our specialist Bitcoin mining equipment (ASICs) and infrastructure. The flexible terms and competitive cost of capital boosted our Zero Emission Mining Strategy and our market position.”

Dr. Arne Scheschonk, Managing Partner of CTCAP Group

References

[1] Petahash per second

[2] Bitcoin Mining Council Survey Q1 2022

END

About Sygnum

Sygnum is the world’s first digital asset bank, and a digital asset specialist with global reach. With Sygnum Bank AG’s Swiss banking licence, as well as Sygnum Pte Ltd’s capital markets services (CMS) licence in Singapore, Sygnum empowers professional and institutional clients or qualified investors (e.g., corporates, banks, and other financial institutions) to invest in the digital asset economy with complete trust. Sygnum operates an independently controlled, scalable, and future-proof regulated banking platform. Our interdisciplinary team of banking, investment, and Distributed Ledger Technology (DLT) experts is shaping the development of a trusted digital asset ecosystem. The company is founded on Swiss and Singapore heritage and operates globally. To learn more about Sygnum, please visit www.sygnum.com.

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This document is purely for educational purposes and has been issued by Sygnum Group. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication. It does not constitute an offer or a recommendation to subscribe, purchase, sell or hold any security or financial instrument. It contains the opinions of Sygnum Group, as at the date of issue. These opinions and the information contained herein do not take into account an individual‘s specific circumstances, objectives, or needs. No representation is made that any investment or strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes personalized investment advice to any investor. Therefore, you must verify the above and all other information provided in the document or otherwise review it with your external advisors. Some investment products and services, including custody, may be subject to legal restrictions or may not be available worldwide on an unrestricted basis. The information and analysis contained herein are based on sources considered as reliable. Sygnum Group uses its best efforts to ensure the timeliness, accuracy, and comprehensiveness of the information contained in this document. Nevertheless, all information indicated herein may change without notice.

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Disclaimer: This content is purely for educational purposes and has been issued by Sygnum Group. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication. It does not constitute an offer or a recommendation to subscribe, purchase, sell or hold any security or financial instrument. It contains the opinions of Sygnum Group, as at the date of issue. These opinions and the information contained herein do not take into account an individual‘s specific circumstances, objectives, or needs. No representation is made that any investment or strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes personalized investment advice to any investor. Therefore, you must verify the above and all other information provided in the document or otherwise review it with your external advisors. Some investment products and services, including custody, may be subject to legal restrictions or may not be available worldwide on an unrestricted basis. The information and analysis contained herein are based on sources considered as reliable. Sygnum Group uses its best efforts to ensure the timeliness, accuracy, and comprehensiveness of the information contained in this document. Nevertheless, all information indicated herein may change without notice.

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