Citi, along with Wellington Management, Wisdomtree, and ABN AMRO, teamed up to try out a new idea using the Avalanche blockchain. They tested turning a private fund into digital tokens, and they did this using Spruce, a part of the Avalanche network.
These tokens were designed to make things like operations and transactions faster and more automated. This could open up new ways to use and combine these digital assets.
Citi Leads Tokenization Test for Private Market Equity Fund
Citi, a big bank, teamed up with Wellington Management, Wisdomtree, and ABN AMRO to try out turning a private investment fund into digital tokens. Each group had different jobs during this trial.
The main goal was to understand how to switch from old-fashioned paper methods to digital ones in private markets.
Citi picked Spruce, a part of the Avalanche network meant for big organizations, to turn the assets into tokens.
During the trial, Wellington Management acted as the one providing the private fund’s assets. ABN AMRO invested in the fund, and Wisdomtree pretended to be a company helping new investors join the trial.
Citi’s Findings on Tokenization Testing
During the testing, they looked at different ways to use tokens. They tried turning a pretend private fund into tokens with rules coded into them, did transactions using IDs from outside, and used the tokens as security in a loan deal with DTCC Digital Assets.
Citi saw lots of good things about using tokens. They thought it could give investors easier access to assets in better ways than before.
They also thought using decentralized ledger tech (DLT) was a big deal. Citi said DLT could help automate things more and make sure everyone follows the rules better. They finished by saying tokens could change how private assets are handled and traded.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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