Citibank Says Blockchain May Make Asset Management More Efficient After Tokenization Experiment On Avalanche

Updated: 15 February 2024

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Citibank is working with Wellington Management and Wisdom Tree to explore the tokenization of private equity funds on the Avalanche block chain.

The global banking giant said in a Feb. 15 press release that “smart-contract capabilities could deliver new functionality and operational efficiencies, which are currently unavailable with traditional assets.”

Wellington’s Private Equity Fund Was Tokenized On Avalanche

The proof of concept involved the tokenization of a Wellington-issued private equity fund, which was brought onto a decentralized network, Citibank said. Fund distribution rules were then “encoded into the smart contract and embedded in the token transferred to hypothetical WisdomTree clients.”

The Full Report

The report concludes that tokenization can unlock value in traditional markets by enabling greater automation, data access, and new operating models through digital identity and smart contracts.https://t.co/mXDuBo33En

— Avalanche 🔺 (@avax) February 14, 2024

Citi also evaluated multiple transfer scenarios using smart contracts. These digital contracts relied on “simulated identity credentials issued by WisdomTree.” They also used a private fund token as collateral in an automated lending contract with DTCC Digital Assets, according to the announcement.

“We believe blockchain-enabled finance is the future of the industry,” said Maredith Hannon Sapp, head of business development and digital assets at WisdomTree. “This Proof-of-Concept showcases the ability to explore the transferability of tokenized funds and related compliance in different markets. “

JP Morgan Uses Avalanche To Tokenize Portfolios

Citi is not the only banking giant that has explored tokenization on the Avalanche network. In November last year, Wall Street banking titan JP Morgan used Avalanche to experiment with the tokenization of portfolios.

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This has the potential to attract more and more people not only to $AVAX but to crypto in total. pic.twitter.com/6CmSwWPaG5

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