Citi Tests Tokenized Securities on Avalanche

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  • Citibank has leveraged Avalanche’s Spruce Subnet to explore tokenizing private equity funds
  • Teaming with WisdomTree and Wellington Management, Citi conducted a proof-of-concept trial tailored for major financial institutions
  • Citi emphasized its commitment to blockchain innovation in collaboration with industry leaders

Citibank is leveraging Avalanche’s Spruce Subnet to explore the tokenization of private equity funds in a move aimed at reshaping capital markets. Teaming up with traditional finance powerhouses WisdomTree and Wellington Management, Citi conducted a proof-of-concept trial on Avalanche’s Spruce, tailored for major financial institutions. Citi says that the strategic partnership underscores its commitment to exploring innovative solutions within blockchain technology, particularly in collaboration with industry leaders, with the news coming five months after Citi announced its own institutional blockchain.

Citi Seeking Tokenization Breakthrough

Tokenization of assets is one of the big benefits of blockchain technology and something that has been explored in various ways, but none have yet made the all-important mainstream breakthrough. Citi and Avalance are looking to change this, with Avalanche creator Ava Labs’ Senior Director of Business Development, Institutions, and Capital Markets, Morgan Krupetsky, outlining her hopes for the partnership to CoinDesk:

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.

Citi’s trial encompassed end-to-end token transfers and secondary trading, demonstrating the potential benefits of blockchain technology, such as increased automation, enhanced compliance, and improved controls for both investors and issuers.

Tokenization Has Multiple Benefits

Nisha Surendran, emerging solutions lead for Citi Digital Assets, backed up this philosophy, telling CoinDesk, “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.”

Tokenized assets offer several benefits over the existing system, including increased liquidity, fractional ownership, streamlined transactions, reduced intermediaries, and enhanced transparency. These advantages can potentially transform traditional capital markets, making them more accessible, efficient, and inclusive.