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Citibank Tests Tokenization of Private Equity Funds on Avalanche
The firm tested a variety of use cases through Avalanche's subnet with a focus on private markets.
Updated Mar 8, 2024, 9:34 p.m. Published Feb 14, 2024, 3:39 p.m.
Citibank used layer-1 blockchain Avalanche’s Spruce Subnet to explore the tokenization of private equity funds to re-architect capital markets.
Citi worked with traditional finance giants WisdomTree and Wellington Management to carry out its proof-of-concept trial that was issued on Avalanche’s Spruce, according to a press release. Spruce is an Evergreen subnet designed for large financial institutions looking to use public blockchain infrastructure.
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Citi joining the subnet is the latest bet from a Wall Street giant looking to dive further into the use cases of blockchain adoption. TradFi firms such as T. Rowe Price, WisdomTree, Wellington Management and Cumberland joined the subnet in April last year to make trade execution and settlements more efficient.
“The growing use of Avalanche by leading financial services firms like Citi, Wellington, WisdomTree, and DTCC Digital Assets continues to cement Avalanche as an institutional blockchain leader,” said Morgan Krupetsky, senior director of business development, institutions and capital markets at Ava Labs, in a conversation with CoinDesk.
The new test by Citi included end-to-end token transfers, secondary transfer to enable trading and validating new capabilities through collateralized lending.
The bank’s proof-of-concept demonstrated how smart contracts could enable greater automation and potentially create enhanced compliance and controls for investors and issuers, according to the press release.
“We believe that by testing the tokenization of private assets, we are exploring the feasibility to open-up new operating models and create efficiencies for the broader market,” said Nisha Surendran, emerging solutions lead for Citi Digital Assets.
Read more: 2024 Will Be the Year Tokenization Truly (Finally) Begins
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