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 a global digital asset banking group, founded on Swiss and Singapore heritage. We empower professional and institutional investors, banks, corporates and DLT foundations to invest in digital assets with complete trust. Our team enables this through our institutional-grade security, expert personal service and portfolio of regulated digital asset banking, asset management, tokenisation and B2B services. In Switzerland, Sygnum holds a banking licence and has CMS and Major Payment Institution Licences in Singapore. The group is also regulated in the established global financial hubs of Abu Dhabi and Luxembourg.

We believe that the future has heritage. Our crypto-native team of banking, investment and digital asset technology professionals are building a trusted gateway between the traditional and digital asset economies that we call Future Finance. To learn more about how Sygnum’s mission and values are shaping this digital asset ecosystem, please visit www.sygnum.com.

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The information in this publication pertaining to Sygnum Bank AG (“Sygnum”) is for general information purposes only, as per date of publication, and should not be considered exhaustive. This publication does not consider the financial situation of any natural or legal person, nor does it provide any tax, legal or investment advice. This publication does not constitute any advice or recommendation, an offer or invitation by or on behalf of Sygnum to purchase or sell any assets. No elements of precontractual or contractual relationship are intended. While the information is believed to be from accurate and reliable sources, Sygnum makes no representation or warranties, expressed or implied, as to the accuracy of the information. Sygnum expressly disclaims any and all liability that may be based on such information, omissions, or errors thereof. Any statements contained in this publication attributed to a third party represent Sygnum‘s interpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. Sygnum reserves the right to amend or replace the information, in part or entirely, at any time, and without any obligation to notify the recipient of such amendment / replacement or to provide the recipient with access to the information. Simultaneously, there is no obligation of Sygnum to inform recipients of information, if before provided information later becomes outdated, inaccurate or obsolete, unless otherwise provided by applicable law. The information provided is not intended for use by or distributed to any individual or legal entity in any jurisdiction or country where such distribution, publication or use would be contrary to the law or regulatory provisions or in which Sygnum does not hold the necessary registration, approval authorization or license. Except as otherwise provided by Sygnum, it is not allowed to modify, copy, distribute or reproduce, display, license, or otherwise use any content for commercial purposes.

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