Citi Leverages Blockchain Technology to Tokenize Private Markets
Banking giant Citi has partnered with Wellington Management and WisdomTree to explore the tokenization of private funds in a proof of concept. By leveraging blockchain technology, Citi aims to digitize private equity and enhance operational efficiencies for buy- and sell-side organizations. The initiative demonstrated that tokenized private equity funds can be issued and securely held on behalf of clients while still working with traditional banking institutions.
Citi Utilizes Avalanche Subnet for Proof of Concept
Citi utilized the Avalanche Spruce institutional test Subnet for the proof of concept. The use of smart contract capabilities on the subnet showcased new functionalities and operational efficiencies that are not currently possible with traditional assets. This opens up opportunities for organizations to interact with distributed ledger technology in a compliant, low-risk, and low-barrier manner.
Increasing Adoption of Blockchain by Financial Institutions
The adoption of blockchain technology by financial institutions continues to grow. Banks recognize the advantages of blockchain, such as transparent and secure transaction recording. Unlike conventional banking systems that rely on centralized databases, blockchain records transactions on a partially decentralized network, reducing the risk of fraud and cyberattacks. This decentralized nature also eliminates single points of failure, making the system more robust and resilient.
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