- Citi conducted a proof-of-concept trial tokenizing private funds on the Avalanche blockchain in partnership with Wellington Management and WisdomTree.
- The trial explored using Avalanche’s smart contracts to bring efficiency to complex, manual private market infrastructure.
- Avalanche’s speed and low costs make it appealing for financial institutions experimenting with tokenizing assets on-chain.
Major financial institution Citi announced on Wednesday that it has conducted a proof-of-concept trial using the Avalanche blockchain to explore the tokenization of private funds.
The global bank teamed up with asset management firms Wellington Management and WisdomTree to carry out the tech trial on Avalanche, the 10th largest cryptocurrency by market cap.
Bringing Efficiency to Private Markets
According to Citi, private markets currently have complex and manual infrastructure. The bank believes Avalanche’s smart contract capabilities could help move assets around in a quicker and more efficient way.
“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,” said Nisha Surendran, emerging solutions lead for Citi Digital Assets.
Avalanche’s Speed and Low Costs
Avalanche is seen as a competitor to Ethereum, aiming to encourage developers to build decentralized applications on its high-speed, low-cost network.
Legacy institutions like Citi and JPMorgan have been drawn to Avalanche as they experiment with bringing assets on-chain. JPMorgan similarly trialed Avalanche last year for tokenizing portfolio assets.
The Takeaway
Citi’s trial indicates growing interest in leveraging smart contracts and tokenization to unlock efficiencies and capabilities for private markets. As banks and asset managers continue exploring blockchain solutions, platforms like Avalanche stand to benefit from mainstream adoption.
