Citi Successfully Concludes Tokenization Trial on Avalanche Blockchain
Citi, along with Wellington Management, Wisdomtree, and ABN AMRO, recently concluded a proof of concept test aimed at tokenizing a private fund on the Avalanche blockchain.
Utilizing Spruce, an Avalanche subnet, the test involved tokenizing the fund and conducting transactions with the tokenized assets.
The primary objectives were to automate operations, expedite settlements, and explore new use cases.
The test involved various roles, with Wellington Management serving as the issuer of the underlying asset, ABN AMRO as an investor, and Wisdomtree simulating the role of a wealth provider.
Together, they aimed to understand the technological, operational, and legal aspects essential for transitioning private markets from analog to digital formats.
Key use cases tested included tokenizing the private fund with smart contract-encoded rules, conducting transactions using externally issued IDs, and utilizing the token as collateral in a lending contract in collaboration with DTCC Digital Assets.
Citi’s findings highlighted the potential benefits of tokenization technologies, offering investors access to assets in innovative ways with enhanced capabilities beyond traditional methods.
Moreover, the introduction of decentralized ledger technologies (DLT) could lead to increased automation and improved compliance and control environments for issuers, distributors, and investors.
Ultimately, Citi sees tokenization as a transformative force in reshaping how private market assets are held and transacted.
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