The Citi Bank used Avalanche to examine the tokenization of private equity funds

• Citi Bank, Wellington Management and Wisdomtree examine the private equity tokenization on avalanche.
• The Proof of Concept shows the potential for improved automation, compliance and control.
• By working with DTCC Digital Assets, interoperability and seamless integration are evaluated.

The Citi Bank, in collaboration with Wellington Management and Wisdomtree, dared to research the tokenization of private equity funds using the Avalanche Blockchain platform.

This innovative initiative aims to revolutionize the capital markets by using blockchain technology to increase operational efficiency and explore new operating models.

Avalanche Spruce subnet

The Proof of Concept carried out by Citi Bank, Wellington Management and Wisdomtree was made easier by the institutional test subnet Avalanch Spruce. This specialized network environment offered an ideal sandbox to test the tokenization of private funds and offered scalability, efficiency and compliance with legal regulations. The infrastructure of the Spruce subnet enabled seamless experimenting with smart contract functions and paved the way for the development of new functionalities and operational efficiency, which have so far been unavailable with conventional assets.

private markets worth around $ 10 trillion have long been fighting with complex infrastructure, lack of standardization and transparency problems. The use of the Avalanche Spruce subnet offers a potential solution for these challenges and offers a secure and efficient platform for the tokenization of private equity funds. By coding the underlying fund distribution rules in smart contracts and their embedding in to investors, issuers and distributors, the Proof of Concept showed the potential for greater automation, improved compliance and improved control environments.

enables seamless integration and interoperability

Experimenting with tokenized private assets also included cooperation with DTCC Digital Assets, formerly known as Securrency in order to evaluate several transmission scenarios with the help of intelligent contracts. This cooperation underlines the importance of seamless integration and interoperability between blockchain-based solutions and the existing financial infrastructure. By using simulated identity evidence of Wisdomtree and the use of private fund tokens as security in automated loan contracts, Citi Bank examined the technical, legal and operational framework conditions that are required to switch traditional assets to a digital platform.

The successful completion of the Proof of Concept marks an important milestone on the way to the general introduction of blockchain technology in the financial sector. As Nisha Surendran, Head of Emerging Solutions at Citi Digital Assets, emphasized, intelligent contracts and blockchain technology have the potential to enable improved implementation of rules on infrastructure level and thus enable seamless data and workflow management. This exploration of tokenized private assets is a crucial step to develop new operating models and to create efficiency for the wider market.

Mark Garabedian, Director of Digital Assets & Tokenization Strategy at Wellington Management, praised the technical sandbox environment of the Avalanch Spruce test network and emphasized the joint efforts between partners to explore the potential of blockchain technology in the industry. Similarly, Maredith Hannon Sapp, Head of Business Development, Digital Assets, at Wisdomtree, the future potential of blockchain-based financing and the role of Proof-of-Concept when examining transferability and compliance tokenized funds in various markets.

The continuous commitment of Citi Bank for the development of digital asset solutions underlines their commitment to innovation and the improvement of their products and services in various financial areas. By working with industrial partners and the use of the latest blockchain technology, Citi continues to avoid the way for the future of financial system.