New York, Thursday, February 29, 2024 – Global leader in wealth management, Citi announced on February 14, 2024, the completion of the proof-of-concept on tokenization of private funds in collaboration with Wellington Management and WisdomTree. 1
The proof-of-concept was carried out by the Avalanche Spruce.
It was identified that smart contract capabilities could facilitate buy and sell side institutions to involve safe distributed ledger infrastructure and prevent entry-level barriers consistent with regulations.
It is expected to introduce this new feature to typical traditional assets, improving productivity.
The infrastructure of the private market is tightly bound by complicated regulations and manual operations related to private assets. But it is deficient in standardization and openness, resulting in inefficient distribution and operations.
The proof of concept tested the tokenization of a Wellington-issued private equity fund networking with distributed ledger technology (DLT) and partnering with ABN AMRO, replicating the traditional investor. Converting the fund distribution rules into smart contracts and were connected with the token transferred to hypothetical WisdomTree clients. The experiment revealed that the utility of smart contracts would be beneficial for greater automation, creating a dominant platform for issuers, distributors, and investors. 1
Citi said it explored offering the clients a controlled system of issuing and accessing tokenized private assets, assessing the framework essential to initiating traditional assets on the digital platform.
“We believe blockchain-enabled finance is the future of the industry, and this Proof-of-Concept showcases the ability to explore the transferability of tokenized funds and related compliance in different markets. This will inform future in-production use cases of how blockchain technology and smart contracts can be used in on-chain transactions,” Head of Business Development, Digital Assets, at WisdomTree, Maredith Hannon Sapp, stated. 1
- Blockchain Equity: https://www.citigroup.com/global/news/press-release/2024/citi-collaborates-with-wellington-management-and-wisdomtree-to-explore-tokenization-of-private-markets[↩][↩][↩]
