Citi has completed a proof of concept on tokenization of private funds along with Wellington Management and WisdomTree.
The proof of concept, which was conducted on the Avalanche Spruce institutional test Subnet, found that smart-contract capabilities could deliver new functionality and operational efficiencies, which are currently unavailable with traditional assets. These new functionalities could enable buy- and sell-side institutions to engage with distributed ledger infrastructure in a low-risk, low barrier-to-entry manner that is consistent with regulations.
Private markets, although a $10 trillion asset class, are characterized by an infrastructure that is complex and manual, with a lack of standardization and transparency, leading to inefficient distribution and operations. There are often complex legal and regulatory restrictions related to private assets.
With ABN AMRO simulating the role of a traditional investor, the proof of concept tested the token
