Citigroup has successfully completed a trial demonstrating the feasibility of using blockchain technology to tokenize private equity funds. This proof-of-concept was done in collaboration with Wellington Management and WisdomTree.
The trial showed that Citigroup can issue and manage tokenized versions of private equity investments on blockchain infrastructure. This allows the assets to be converted into digital tokens on the blockchain while still remaining compliant with regulations and compatible with Citigroup’s existing systems.
Citigroup sees blockchain technology as having the potential to modernize and improve its operations in areas like transaction transparency, settlement speed, and efficiency. The positive outcomes from this trial will inform strategic decisions at Citigroup on whether to roll out new client services for tokenized private equity investments and other blockchain-based offerings.
This blockchain trial is part of Citigroup’s broader efforts to embrace digital assets and blockchain technology. For example, last September the bank launched a service allowing customers to convert deposits into stablecoin tokens for faster cross-border transactions.
Citigroup’s exploration of blockchain comes at a time when the crypto and digital asset market is seeing renewed mainstream interest. Contributing factors include the launch of the first Bitcoin ETFs as well as Bitcoin prices reaching a 2-year high. The success of Citigroup’s trial indicates the banking industry is ramping up adoption of blockchain technology and digital assets.
Looking ahead, Citigroup is expected to make decisions soon on introducing new client services and offerings utilizing blockchain and tokenization. The trial proves the bank can integrate this technology with compliance needs and existing infrastructure.
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