Banks Embrace Ethereum 2.0 Staking

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Swiss banks are participating in Ethereum 2.0 staking, which brings much-wanted credibility to the proof-of-stake ETH upgrade, as well as services such as Stake&Trade

Sygnum Bank, the world’s first digital asset bank, makes the first step to enter Ethereum 2.0 staking. The Switzerland-based bank will offer its institutional customers a way to conveniently and securely stake Ethereum from their existing wallets.

Blockdaemon and Bison Trails, leading blockchain infrastructure providers running staking nodes on Ethereum 2.0, also revealed that they are working with large companies that want to participate in the next breed of Ethereum tech.

What is Ethereum 2.0 Staking?

Ethereum is the leading smart contract platform with over $250 million in market capitalization. Its proof-of-stake (PoS) will pave the way for exciting rewards for Ethereum holders. Far from Bitcoin’s laborious and costly mining systems, next-gen blockchain networks use PoS, a more manageable and less risky way for crypto holders to earn rewards while helping secure the networks.

Crypto enthusiasts make passive income from staking Ethereum. By locking their ETH coins on the network, staking validators gain considerable rewards in ETH. In staking, full validators need to deposit 32 ETH to start a validator software.

Validators will store data, process transactions, and add new blocks to the blockchains. As a reward, they will earn ETH while keeping the network secure for everyone. Unlike Bitcoin’s proof-of-work, no high computational resources or hardware is required.

ETH staking pools are becoming more popular. In programs like SimpleFX Stake&Trade, users can participate in one validation node. There are no minimum deposits, and the annual percentage rate (APR) is 8.55%. Inspired by the Community Forum, SimpleFX invented a unique service where participants can reinvest the locked ETH in margin trading. This creates an opportunity for even more profit or hedging against a drop of ETHUSD.

Swiss Bank Leading the Pack

Switzerland has been one step ahead in the global adoption of crypto assets.

Last year, it adjusted its Code of Obligations to embrace cryptocurrencies and blockchain mainstream with an extensive set of laws to regulate blockchain transactions.

Sygnum Bank, a Swiss digital asset bank, is the first bank in the world to offer Ethereum 2.0 staking. This is just one of the many yield-bearing digital asset products that the bank provides to its clients. Sygnum also supports many key decentralized finance (DeFi) tokens.

According to Thomas Eichenberger, head of business units at Sygnum Bank, Sygnum’s staking service will entail investors to lock in multiples of 32 ETH for an indefinite time until the transition to Ethereum 2.0 is complete. The service will generate from  6.5% to 8% yield per annum.

Sygnum is the world’s first digital asset-focused bank to secure a banking license in Switzerland and a capital markets services license in Singapore in 2019. Sygnum’s institutional staking is “bank-grade,” with Securosys as its hardware security provider to manage the withdrawal keys. The bank also partnered with Custodigit, which leverages Metaco, a trusted crypto custody provider to banks like Standard Chartered and GazpromBank Switzerland.

Large Companies Bullish on Ethereum 2.0 Staking

Institutional interest in Ethereum is making its way to the spotlight.

“Ethereum 2.0 is a really big deal,” according to Konstantin Richter, founder, and CEO of Blockdaemon. He compared that in the future, holding ETH in a wallet and earning interest will be as simple as having a checking account with a bank.

Compared with other asset classes, earning returns by staking could potentially be among the best alternative investment prospects that retail and institutional investors should look into, as reported by Morgan Stanley.

JPMorgan, the leading US investment firm, also stated in its report that staking could skyrocket to $40 billion by 2025. This boost will be fueled by investors preferring to hold cryptocurrencies due to their earning yields as the more attractive options, fast-tracking staking to mainstream adoption.

Furthermore, JPMorgan’s report expressed that Ethereum’s transition to proof-of-stake will be a vital turning point for the staking economy, which will end mining for Ethereum, the world’s second-largest cryptocurrency.


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