According to a report by CoinDesk, Citigroup announced on Wednesday (14th) that it has partnered with traditional financial giants WisdomTree and Wellington Management to complete the proof of concept for tokenizing private equity funds on the Spruce subnetwork of the Layer 1 blockchain Avalanche.
This new experiment includes testing end-to-end token transfers, secondary transfers for transaction execution, and verification of new features through collateralized loans. Citigroup stated that although the private market is a $10 trillion asset class, its infrastructure is complex and relies on manual operations, lacking standardization and transparency, resulting in low distribution and operational efficiency. The legal and regulatory restrictions associated with private assets are often complex. The proof of concept conducted on the Spruce subnetwork revealed that smart contract functionality can provide new features and operational efficiency that traditional assets currently lack.
Spruce is an Evergreen subnetwork of Avalanche designed specifically for large financial institutions seeking to adopt public blockchain infrastructure. In April last year, traditional financial companies such as T. Rowe Price, WisdomTree, Wellington Management, and Cumberland joined Spruce with the aim of improving transaction execution and settlement efficiency.
Morgan Krupetsky, Senior Director of Institutional and Capital Markets Business Development at Ava Labs, the development team of Avalanche, stated in an interview with CoinDesk:
