Citi Bank used Tier 1 Avalanche’s (AVAX) Spruce Subnet to explore the tokenization of private equity funds to redesign capital markets.
Citi partnered with traditional finance giants WisdomTree and Wellington Management to conduct its proof-of-concept trial released on Avalanche’s Spruce, according to a press release. Sparring is one Evergreen subnet designed for large financial institutions looking to leverage public blockchain infrastructure.
Citi’s entry into the subnet is the latest gamble from a Wall Street giant looking to delve further into the use cases of blockchain adoption. TradFi companies such as T. Rowe Price, WisdomTree, Wellington Management and Cumberland joined the subnet in April last year to make transaction execution and settlement more efficient.
Citi’s new test included end-to-end token transfers, secondary transfer to enable trading, and validating new capabilities through collateralized lending.
The bank’s proof-of-concept showed how smart contracts can enable greater automation and potentially create improved compliance and controls for investors and issuers, the press release said.
“We believe that by testing the tokenization of private assets, we are exploring the feasibility of opening up new business models and creating efficiencies for the broader market,” said Nisha Surendran, emerging solutions leader for Citi Digital Assets.
Read more: 2024 will be the year that tokenization really (finally) begins